Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENERGY

Energy Conservation

Mr. Hooley: asked the Secretary of State for Energy what estimate his Department has made of the amount of fuel, expressed in million tonnes of coal equivalent, saved during 1981 by the various Government conservation measures.

The Under-Secretary of State for Energy (Mr. David Mellor): It is impossible to estimate the savings attributable to conservation measures alone. I estimate that in round terms a combination of energy price movements and conservation policies was responsible for savings of the order of 10 million tonnes of coal equivalent in the two-year period 1979 to 1981.

Mr. Hooley: Is the Minister aware that, on the most optimistic calculation, the Sizewell station will not feed electricity into the grid until 1992 and should cost about £2,000 million? Would not a more vigorous conservation programme over the next 10 years be more beneficial to the nation, both in energy and in jobs?

Mr. Mellor: I cannot confirm the hon. Gentleman's assertions, but whatever conservation policies are pursued there will always be a need for modern equipment capable of generating electricity cheaply.

Mr. Rost: Will my hon. Friend admit that there must be something wrong with Britain's energy conservation effort when large sections of the insulation industry are working at well below capacity, when millions of buildings are inadequately insulated and when a large number of people are unemployed?

Mr. Mellor: More than three quarters of a million homes had their lofts insulated in 1981, many of them with assistance from the Government's home insulation scheme, and there is continuing progress on insulation projects within industry. Therefore, I do not accept that my hon. Friend's pessimism is justified.

Gas Prices

Mr. Teddy Taylor: asked the Secretary of State for Energy how many letters he has received from the general public on matters relating to gas prices.

The Under-Secretary of State for Energy (Mr. John Moore): My Department has received approximately 350 letters relating to gas prices this year.

Mr. Taylor: Has my hon. Friend gathered from that correspondence that there is considerable public concern, particularly among those who have invested in expensive gas central heating equipment, about the extent to which gas prices have increased? Can my hon. Friend therefore give the consumer any hope on gas prices over the next two, three or four years?

Mr. Moore: It is not an easy adjustment for people to make, and to that extent my hon. Friend is right. Future legislation will increase the potential for additional supply through competition and must be of help to the consumer.

Mr. Merlyn Rees: Will the Government impose any more gas price increases on the domestic consumer before the general election?

Mr. Moore: The Government's attempt to rectify past problems, which were recognised by the right hon. Gentleman the last time we discussed this matter, will be completed this year. To that extent, one would hope to see the consumer benefit from the Government's courage in going through the process of adjustment.

Mr. Hannam: Is my hon. Friend aware that many people in my constituency and elsewhere in Britain live just outside the 25 yds connecting limit and cannot be connected to gas supplies, even if they live on housing estates? Does he agree that that is a result of the instability of supply caused by low gas prices for several years under the Labour Government?

Mr. Moore: My hon. Friend is right. More than 25 per cent. of the nation cannot receive gas, which is still a decent buy compared with other fuels, but have to pay 40 to 60 per cent. more for oil and electricity to heat their homes.

Mr. Robert C. Brown: Will the Minister be less coy and more forthcoming and admit that the vicious increase in gas prices over the past three years has been the direct result of the Government's policy that prices should be increased by the rate of inflation plus 10 per cent?

Mr. Moore: I must draw the hon. Member's attention to the comments of the right hon. Member for Leeds, South (Mr. Rees) on the Opposition Front Bench the last time we discussed this matter. His only complaint seemed to be that we had not made the radical adjustment to reality fast enough.

Energy Depletion Policy

Mr. Skeet: asked the Secretary of State for Energy if he will make a statement on the energy depletion policy of Her Majesty's Government.

The Minister of State, Department of Energy (Mr. Hamish Gray): My aim is to help create conditions that will ensure the efficient exploitation of our national energy resources. That way maximum encouragement will be given to prolonged, high levels of economic production.

Mr. Skeet: Surely my hon. Friend must realise that the Department has had eight years in which to think about depletion policy. Bearing in mind the very high rates of taxation, falling oil prices, and the likelihood that by 1984–85 we shall pass the peak of production, will my hon. Friend assure the House that no further provision will be made for depletion policy, as it is not required? The public are entitled to know the Government's policy.

Mr. Gray: The depletion policy for oil is that which was given in the House by my right hon. Friend the Member for Guildford (Mr. Howell) when he was Secretary of State for Energy.
The Government are constantly aware of the need to consider future depletion policy, but we have no immediate plans to make an announcement.

Mr. Rowlands: Is there not a growing jobs crisis in the offshore supply industry, and a crisis in confidence, leading from the Government's incoherent attitude towards depletion and development? Will the Minister assure the House that we shall have a substantive statement on energy depletion policy, as compared with the nonsense that he has just spoken about depletion, so that industry can plan for the future?

Mr. Gray: It is very easy to make that sort of pronouncement from the Opposition Benches, but the Government have to bear their responsibilities in mind. The Government cannot authorise annex B's for proposed developments if the oil companies do not submit them. The North Sea is an extremely difficult place in which to work, and technical problems constantly arise. We are having discussions with several companies. I have no doubt that in due course annex B's will come forward and that the offshore supply industry will receive its share of orders.

Mr. Gordon Wilson: I readily accept that the Labour Government had no depletion policy either, ever since they entered into the Varley assurances, but will the Minister agree that if the purpose of the Government is to use market conditions to create ideal circumstances for the exploitation of oil, we have the worst of all worlds, with the collapse of oil prices, partly due to over-production, and the very likely starvation of the oil platform yards? Is not the whole matter completely and utterly out of balance?

Mr. Gray: The hon. Gentleman has got it wrong. With the best will in the world, it is impossible to develop our North Sea resources in a way that will ensure a continuous flow of orders. The Select Committee on Energy will shortly be making known its deliberations on depletion, and it will be interesting to read its comments.

Mr. John H. Osborn: To what extent will my hon. Friend balance a depletion policy against the pressures of normal market forces? Whereas it makes sense to sell oil to our EEC partners and to others, will he consider a cross-channel gas pipeline and link, so that it is possible to buy as well as sell gas, particularly if the EEC countries can obtain cheaper supplies of gas from third countries?

Mr. Gray: My hon. Friend will be aware that, for example, we buy a substantial quantity of gas from Norway.
My hon. Friend will realise that the demand for gas in Britain at present is not fulfilled. Therefore, it is unlikely that we would consider exporting gas in the meantime. If, however, as a result of our policy—which is to encourage the private sector to explore further for gas—a great deal of gas becomes available, exports will be considered again at that time.

Mr. Hooley: Has the Minister noted that the question refers to energy depletion and not just to oil depletion? Would it not be sensible for the Government to concentrate a little more effort on resources such as sun, wind and wave, which are non-depletable? Will he comment on the absurd recommendations made recently by ACORD, which are contrary to everything that our partners in Western Europe are doing?

Mr. Gray: It was significant that the hon. Gentleman should have omitted what is probably the most important factor of all, namely, nuclear power, in regard to which we are proceeding with our programme with all haste.
A substantial amount of money is being made available each year for research and development in regard to the other sources of energy that the hon. Gentleman mentioned, but he will appreciate that several of them are not yet at the stage at which they could absorb a massive injection of development funds.

Crude Oil

Mr. Chapman: asked the Secretary of State for Energy what was the total United Kingdom crude oil production and consumption for the last quarter for which figures are available; and how these figures compare with the same quarter a year before.

Mr. Gray: Provisional figures for total United Kingdom petroleum production and consumption in the three months January to March 1982 are 23·5 million tonnes and 19·8 million tonnes respectively. Corresponding figures for the same period in 1981 are 21·9 million tonnes and 19·9 million tonnes.

Mr. Chapman: In view of those encouraging figures—which again underline the fact that we are now self-sufficient in oil—does my hon. Friend believe that the recent increase in the number of onshore exploration licences which have been granted is justified, particularly in view of the adverse environmental consequences of some of them?

Mr. Gray: Yes, I would certainly say that the increase is fully justified. My hon. Friend will appreciate that it is essential that we determine the exact extent of our resources for the future.
With regard to the environment, I reiterate that the award of a licence does not exclude the licensee from the normal planning requirements.

Mr. Robert C. Brown: Does the Minister agree that our North Sea oil and gas resources are finite? That being so, will he accept that our consumption and production should be level? Is it not a betrayal of future generations of Britons to extract oil so quickly in order to pay for the 3 million unemployed?

Mr. Gray: I find it very difficult to equate what the hon. Gentleman has just said with the utterances from his own Front Bench a little earlier. He will appreciate that if we were to cut back production substantially, far from increasing the opportunities for our offshore supply industry, we would be removing them.

Mr. Budgen: Does my hon. Friend agree that lower oil prices are bound to lead to reduced activity in the North Sea? Is not the temporary hiccup more than balanced by the enormous advantages, particularly to heavy manufacturing industry, of having lower fuel prices?

Mr. Gray: My hon. Friend is correct. Lower oil prices offer us many benefits.

"Coal and the Environment"

Dr. Edmund Marshall: asked the Secretary of State for Energy when the Government's reply to the report of the Commission on Energy and the Environment, "Coal and the Environment", is now expected to be published.

Mr. John Moore: The Government are still considering the many recommendations in the CENE report on "Coal and the Environment" and our response, which is being prepared jointly with my right hon. Friends the Secretaries of State for the Environment, Scotland and Wales, will be published as soon as possible.

Dr. Marshall: What progress have the Government made in reaching a decision on the recommendation of the commission that applications for opencast coal mining

should be determined by the general planning machinery for mineral development, rather than by the Secretary of State for Energy?

Mr. Moore: I am very concious of the hon. Gentleman's point. That, among the 120 other detailed recommendations, is legitimately taking a considerable amount of time to consider.

Mr. Teddy Taylor: Since the environmental objections to opencast mining have been largely removed because the land is usually restored to a much better condition than it was in originally, and since, also, opencast production is cheaper and safer for the miners—they do not have to go underground and risk their lives—why do not the Government go forward with a positive policy of encouraging opencast production by every means possible?

Mr. Moore: My hon. Friend will know that there is a difference between increases in opencast production since the Government came to office and the particular question at issue in the CENE report concerning the method of controlling the ultimate decision on opencast licences,

Mr. Dormand: Does the Minister recall that in that report it states that because of coal pollution the Durham beaches are the worst in the country? Is he aware that the National Coal Board has made strenuous efforts to improve the position, including spending a lot of money, but now it rightly says that it has reached the end of its resources? Will the Government urgently provide the little extra that is needed?

Mr. Moore: The hon. Gentleman will be conscious, because of his long and legitimate pursuit of the matter for a constituency interest, that the "little extra" is rather more substantial than he seemed to indicate. The financial implications of the CENE report are a factor in the joint Ministeries' discussions on the matter.

Mr. Allen McKay: Will the Minister think again about his answer to my hon. Friend? Is he aware that in my constituency about 780 acres of opencast mining is proposed, which involves 15 to 20 years of working, far in excess of any time that any individual Secretary of State or Minister, on either side, will be in office? Therefore, it is essential that, for example, local government, which is permanent, should take this matter in hand and look after the planning permission for these matters.

Mr. Moore: All of us who participated in the 19 March debate on the subject will be aware of the consequences and difficulties that are involved in the question. Today we are being asked specifically about the changing of the inquiry process, which, to some extent, is under consideration.

Domestic Supplies (Standing Charges)

Mr. Bowden: asked the Secretary of State for Energy whether he will make a statement on his review of standing charges for gas and electricity for those on low incomes.

Mr. Stallard: asked the Secretary of State for Energy if he is yet in a position to announce the results of his review of fuel standing charges.

Mr. Mellor: With my hon. Friend the Under-Secretary of State for Health and Social Security, I am making


progress in a thorough review of the effects of standing charges on poor consumers, and ways of alleviating any difficulties. We shall announce the results as soon as possible.

Mr. Bowden: Will my hon. Friend bear in mind that many pensioners pay more in standing charges than they do for fuel? Is that not terribly unfair?

Mr. Mellor: I know of my hon. Friend's tireless work on behalf of pensioners. We are examining carefully the effect on pensioners of standing charges. However, preliminary indications are that while there are people in the plight that my hon. Friend describes, for the average pensioner, and for poor consumers generally, the standing charges represent only about 20 per cent. of fuel bills. In other words, elderly and poor consumers are not necessarily small consumers, and that 20 per cent. compares with 15 per cent. for the average consumer.

Mr. Wigley: Will the Minister confirm that the increase in standing charges for gas has in some cases been over 300 per cent. over the past four years? Will he also confirm that this is part of a trend that is in danger of continuing, whereby the authorities are trying to recoup all the fixed costs from standing charges? If that is the case, it is thoroughly regressive and should be avoided.

Mr. Mellor: The standing charge reflects a genuine distinction in the industry's costs, as was endorsed by the 1979 Price Commission report. On the hon. Gentleman's figures about gas standing charges, I must ask him to bear in mind that before the election of this Government there was a triple tariff in that, as well as the standing charge for gas, there was an enhanced charge for the first 52 therms. If at the time of the last election that enhanced charge had been removed, as it now has been, the standing charge for gas would have been about £6·37 a quarter, not dramatically below what it is today.

Mr. Rowlands: Is this not the third Question Time when the hon. Gentleman has been pressed from both sides—there is no party argument about this—on the whole question of standing charges and the imbalance that has arisen between the increases in those charges and the increases in charges for consumption? Will the Minister take into account the impatience that has been expressed by both sides of the House for a review and changes in what has been proposed?

Mr. Mellor: I am aware of the concern, which I share. My hon. Friend the then Under-Secretary of State for Health and Social Security announced the review early this year, showing that the Government had anticipated some of the concern. We shall not take a moment longer than we need to complete the review properly.
I am sure that the hon. Gentleman will be aware that the last thorough and proper review was in 1976 under the Government of which he was a member. It took about 12 months to carry through. The hon. Gentleman should not feel that these issues are easy or that we can deal with them in just a few weeks.

Mr. Warren: I refer my hon. Friend to the letter to me from the Under-Secretary of State on 18 March, in which I was told that an increase in the unit costs of electricity and gas of about 15 to 20 per cent. could wipe out the standing charge system. Would that not be of tremendous help to people on low incomes?

Mr. Mellor: I am glad that my hon. Friend has made the point. Standing charges bring into each industry about £500 million a year. We are exploring, as the 1976 study did, the impact of adding to the unit costs. It was found then that an increase of that kind, given that many poor consumers are not small consumers, would have borne more heavily upon them than standing charges now do.

Mr. Foulkes: Is the Minister aware that there is increasing concern at the Government's complacency about this matter? Does he understand that a single pensioner can spend up to 8 per cent. of his or her pension on standing charges alone, before having delivery of any of the services involved? Will the Government deal with this as a matter of urgency?

Mr. Mellor: I fear that the hon. Gentleman is trying to make a party point, when none is appropriate. We are building on the foundations of the 1976 review, looking at the matter thoroughly. The review was announced less than three months ago. I hope that it will be only a matter of weeks before we are able to say something more substantial to the House. I ask the hon. Gentleman to understand that these matters cannot be dealt with overnight and that we are treating them as seriously as I am well aware both sides of the House would wish us to.

Gas

Mr. Waller: asked the Secretary of State for Energy what effect he expects the differential in price movements of gas supplied to industrial and domestic consumers to have on the future relative demand for gas from these sectors.

The Secretary of State for Energy (Mr. Nigel Lawson): The rises in gas prices to domestic consumers have enabled the British Gas Corporation to hold down the price of gas to industry. To the extent that this curbs demand in the domestic market, it will make increased supplies of gas available to industry.

Mr. Waller: Is it not a fact that, for the first time for many years, the relative prices of gas for different categories of users are rationally and economically defensible? Does not the history of gas prices over the past few years show how unwise it is for Governments artifically to hold down the price of gas and other fuels for political or electoral reasons?

Mr. Lawson: My hon. Friend is right. By the end of this year, at long last, gas prices to both the domestic and the industrial market will be more or less appropriately related to costs. It was grossly irresponsible of the previous Administration to hold down domestic prices for gas as they did. That was a penalty for industry both in making less gas available for industry and forcing industrial prices higher than they should have been. I hope that now we have the relativities on a sensible basis we shall be able to go ahead, to the benefit of the industry and the consumer alike.

Mr. Merlyn Rees: Did not the Government freeze gas prices in the autumn of 1979 shortly after they came to power? That being the case, the Minister's comments are political clap-trap.

Mr. Lawson: They are far from being political claptrap. What the right hon. Gentleman is saying is that we


did not straight away put right the follies of his Government. I concede that. We have now taken action, and done so.

Mr. Eggar: Do domestic gas prices in the United Kingdom compare with domestic gas prices on the Continent?

Mr. Lawson: Domestic gas prices in this country, despite recent rises, are substantially lower than domestic gas prices in France, Germany and most Continental countries. In some cases they are only half what they are on the Continent.

Electricity Demand

Sir William van Straubenzee: asked the Secretary of State for Energy whether he will make a statement on future electricity demand.

Mr. Mellor: My Department is currently updating its detailed projections of the demand for electricity and the forms of energy. These will be published later in the year in good time for the public inquiry at Sizewell.

Sir William van Straubenzee: Will my hon. Friend assure me that if his figures and those produced by the CEGB show a smaller rate of increase in demand than previously—say over the past decade—he will, nevertheless, concentrate extensively on the nuclear power programme, notwithstanding the higher production costs, in the longer-term interests of the country as a whole?

Mr. Mellor: I am happy to give my hon. Friend that assurance.

Mr. Ioan Evans: Will the Minister ensure that, rather than build oil-burning power stations, we shall increasingly go over to coal-burning units? Can the Minister make a statement on the future of the Aberthaw coal-burning plant in South Wales, where there have been certain difficulties in recent months?

Mr. Mellor: The hon. Gentleman will be aware that over 80 per cent. of our electricity is now generated from coal, and it is inevitable and right that by far the largest proportion of our electricity will come from coal. Most oil-fired stations are now used only to cover peak periods. Plainly, the economics of running oil stations now make it impossible to use them for base load functions.

Mr. Rost: Will not the future demand for electricity be strongly influenced by its competitiveness against other fuels? Is it not therefore most important to continue with the nuclear programme, which will relatively reduce the cost of electricity compared with what it would otherwise be?

Mr. Mellor: I have to agree with my hon. Friend. I remind the House that the CEGB states that of all the power stations on the national grid, that at Hinckley B—one of our AGRs—produces the cheapest electricity. We should bear that in mind. We should also bear in mind that all our operative nuclear power stations are on base load function—in other words, they are producing electricity all the time.

Lead-free Petrol

Mr. Canavan: asked the Secretary of State for Energy what representations he has received about the provision of lead-free petrol.

Mr. Gray: I have received a number of representations about this from hon. Members and from the public. My right hon. Friend the Minister for Local Government and Environmental Services is responsible for policy on environmental lead generally, but I can confirm the Government will keep the question of lead in petrol under careful review, along with all the other aspects.

Mr. Canavan: Does the Minister agree with the recent American evidence that lead in petrol could account for as much as 67 per cent. of the lead level in human blood—evidence which contradicts the assessment of British Government experts? In view of the damage caused to children's mental health by the Government's refusal to move more quickly towards lower statutory maximum levels of lead in petrol, will the Government at least consider requiring all petrol stations to have lead-free petrol available for sale to the public as soon as possible?

Mr. Gray: The hon. Gentleman should bear in mind that Government decisions on this matter were taken only after the advice that we received from our own chief medical officer. The Government decision to reduce lead in petrol to 0·15 grams per litre will reduce vehicle emissions by two-thirds by 1985. That is by far the quickest and most effective way to achieve such an improvement.

Mr. Durant: I welcome the steps that the Government have announced on lead in petrol. Will my hon. Friend begin discussions with the motor car industry—which is the key to the matter—about how long it will take to change the motor car system to deal with lead-free petrol?

Mr. Gray: Discussions of course take place between my right hon. and hon. Friends at the Department of Industry and the motor car industry, but lead-free petrol would necessarily be low octane, and thus will not rally be an option for the vast bulk of cars that will be on our roads into the 1990s. Indeed, probably no more than 10 per cent. of the 15 million petrol-driven vehicles currently on our roads could use it.

Mr. Spearing: Will the Minister now answer the question that was asked by my hon. Friend the Member for West Stirlingshire (Mr. Canavan) about the American studies? Have the Government looked at those studies, and do they believe that they are correct? Will the Minister say whether there is any mechanical reason why petrol refineries should not be adjusted before the date that he mentioned?

Mr. Gray: The hon. Member will recall that in my initial answer I said that the Department of the Environment is in the lead on this subject. Examination of figures such as those presented by the hon. Member for West Stirlingshire (Mr. Canavan), will of course be looked at by that Department.

Sir Hector Monro: I am pleased to accept my hon. Friend's comments on this issue, but will be bear in mind that the advice is very conflicting, that many high compression engines in this country will have extreme difficulty in operating on lower octane fuels, and that in any event such a move will lead to much greater fuel consumption for the majority of cars?

Mr. Gray: My hon. Friend is absolutely correct. What he has said will be noted by those who are in the lead on this subject.

Central Electricity Generating Board

Mr. Palmer: asked the Secretary of State for Energy if he will make a statement on his decision not to reappoint Mr. Glyn England as chairman of the Central Electricity Generating Board.

Mr. Rost: asked the Secretary of State for Energy when he expects to announce the appointment of the chairman of the Central Electricity Generating Board.

Mr. Lawson: I have written to Mr. England expressing my appreciation of his long and distinguished service to the electricity supply industry. I have decided, however, that it is time for a change. I hope to announce the appointment of a new chairman fairly shortly.

Mr. Palmer: Is the right hon. Gentleman aware that the virtual dismissal of this eminent engineer, who probably knows more about the public electricity supply business than all the race of politicians put together, has caused great resentment within the electricity supply industry? Secondly, is not the the real reason for the virtual dismissal of Mr. Glyn England that he dared to oppose the doctrinaire policies of the Government?

Mr. Lawson: First, the policies of the Government are in no way doctrinaire. Secondly, Mr. England was not dismissed. His five-year appointment simply came to an end. Thirdly, to suggest by implication, as the hon. Gentleman does, that Mr. England is the only man in the electricity supply industry who knows anything about electrical engineering or the industry as a whole——

Mr. William Hamilton: He did not say that.

Mr. Lawson: —is to abuse the whole electricity supply industry. I am sure that the hon. Gentleman would be the last person to wish to do that.

Mr. Rost: Does my right hon. Friend accept the desirability of finding a chairman who will be sympathetic towards improving the efficiency of the industry, giving the area boards far greater independence to produce as well as to distribute, and, above all, seeing that the fuel in our power stations is burnt more efficiently, and raising thermal efficiency by doing more to try to market some of the wasted heat?

Mr. Lawson: I am sure that one of the advantages of having a new chairman with a fresh viewpoint—quite possibly from outside the electricity supply industry altogether—will be that it will allow a fresh impetus, to make the industry more efficient for the benefit of domestic and industrial consumers alike. However, it is premature at this stage to judge the means of achieving that greater efficiency.

Mr. Merlyn Rees: Does the Secretary of State accept that the going of the chairman of the CEGB has been rather offensively handled, and that other people who may be attracted to the public service may now draw back in view of the way in which it was done? Now that the Secretary of State says that someone may be appointed from outside the electricity generating service, or the professional side, will he assure the House that, whoever is appointed, it will not be a narrow political appointment?

Mr. Lawson: I assure the right hon. Gentleman that whoever is appointed will be the best man for the job and that it will not be what the right hon. Gentleman calls a "narrow political appointment".

Mr. Eggar: Will my right hon. Friend consider requiring that any future chairman of the Central Electricity Generating Board should be under a contractual obligation to place his resignation before any new incoming Government?

Mr. Lawson: My hon. Friend raises a major question of nationalised industry policy in general, which goes far beyond the limited confines of the question.

Mr. Edwin Wainwright: Does the Secretary of State realise that Governments come and go, as do Secretaries of State? If the chairmen of the various nationalised industries are to suffer because they happen to disagree with the right hon. Gentleman, and are therefore not reappointed, does that not create the impression that it is not the welfare of the country as a whole that matters, and that any Government will look at the problem simply from their political standpoint, not that of the future of the industry?

Mr. Lawson: It is the duty of each Secretary of State of whichever party and whichever Government to do what he thinks is best for the industry and for the nation. That may occasionally involve a change in the chairman of a nationalised industry. That is a fact of life.

Mr. Palmer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of all those replies, I wish to give notice that I will raise this matter on the Adjournment next Monday, 24 May, to be precise.

Mr. Speaker: I am very grateful for the notice. Coal Industry

Coal Industry

Mr. Dormand: asked the Secretary of State for Energy if he will make a statement on the phasing of investment in the coal industry.

Mr. John Moore: The phasing of investment in the coal industry, within the annual capital approval set by Government, is a matter for the National Coal Board.

Mr. Dormand: Will the Minister comment on the decision by British Petroleum to withdraw its promised investment in the coal liquefaction scheme at Point of Ayr? Will the Minister give an absolute assurance that the decision will not prevent further Government investment in the scheme? Does he agree that Britain could lead the world in this technology and that a shortage of further investment, at least to replace the BP withdrawal, would be nothing short of criminal?

Mr. Moore: There is a later question on the Order Paper on this issue. To the extent that the Government might not invest, may I make it clear that the Government offer of £5 million aid is still open and is still contingent upon the National Coal Board securing a significant contribution from private industry? It would be premature to comment further.

Sir Anthony Meyer: Is my hon. Friend aware that that reply, and his reply to my written question last week, entirely fail to explain why the Government do not approach the EEC for an increased stake in this vital enterprise which may be marginal for the United Kingdom but is vital for Europe as a whole?

Mr. Moore: I accept and understand my hon. Friend's constituency interest in the matter, but, as I explained to


him, two points should be made. First, of course, the EEC is already putting up the maximum proportion of aid available from the coal gasification and liquefaction programme of the Community's alternative energy demonstration scheme. Secondly, the Government set great store, as does the whole of the industry—which wishes to see such projects succeed—on a substantial private sector participation. That is a crucial feature of the success of this long-term project.

Coal Industry

Mr. Knox: asked the Secretary of State for Energy what has been the increase in labour productivity in the coal mining industry over the most recent 12-month period for which figures are available.

Mr. John Moore: National Coal Board productivity last year, as measured by overall revenue output per manshift, was 3·4 per cent. higher than in 1980–81.

Mr. Knox: Does my hon. Friend agree that this is a satisfactory situation and a great tribute to the miners and all those connected with the mining industry? Does he expect productivity to continue to rise in the current year?

Mr. Moore: My hon. Friend is right. I took the opportunity at the British Association of Colliery Management conference on Friday to congratulate mining management and the miners on the excellent increase in productivity. We trust that it will continue, as we need such productivity improvements to make up for the sad lack of productivity improvements in past years. That will help the mining industry to retain its markets and obtain new ones.

Mr. Hardy: Will the Minister join me in expressing regret that only one Conservative Member has risen with a supplementary question on this issue, since over the past 10 years Conservative Members have consistently demanded better attendance in the pits? Is it not clear that attendance in the pits is a good deal better than that normally seen on the Conservative Benches?

Mr. Moore: I am sure that the hon. Gentleman does not want a head count to illustrate the consistent number of hon. Members on the Conservative Benches during Energy Questions. Absenteeism in the pits is down. The hon. Gentleman knows that attendance is the best for 40 years. However, that significant improvement should not mask the fact that between 1974–75 and 1978–79 output per manshift declined.

Mr. Eggar: The figures announced by my hon. Friend are no doubt encouraging, but would they not have been better if the uneconomic pits had been closed in accordance with "Plan for Coal"?

Mr. Moore: Clearly we are in a period of over-supply, and the inability of the industry to close all of its uneconomic pits has added to the problems of over-supply and made the costing much more difficult for the industry in seeking new markets.

Mr. Rowlands: Is the Minister aware that, in communities such as mine, where miners have been breaking production records every week in the past year or two, it is not only their efforts but the capital investment in those pits that has made the difference? It was capital investment derived from "Plan for Coal", established in

1974 and 1979, that got things going. Is it not worrying that there has been a large-scale cut in capital investment in places such as South Wales?

Mr. Moore: The hon. Gentleman is inaccurate. There has not been a massive cut. Capital investment for this year will be about £886 million. Capital investment totalling £3 billion has been put into the industry since 1974–75. Beyond investment, good management and excellent work by the workers are the important changes in the productivity payment scheme since 1978. Those are crucial factors in improving productivity in the industry.

Combined Heat and Power

Mr. Spearing: asked the Secretary of State for Energy if he will make a statement concerning the progress of schemes for combined heat and power.

Mr. Mellor: The present stage of the feasibility programme is nearing completion. Although some inputs to the consultants' work have been delayed, we n3w expect their report to be completed within about six weeks.

Mr. Spearing: I am grateful for that information. Can the Minister assure the House that between now and the time when those reports are published the Central Electricity Generating Board will take no steps either to dismantle or decommission power stations which, as a result of these studies, might conceivably be used for these schemes? Has the hon. Gentleman asked this question and received such assurances?

Mr. Mellor: The CEGB has a programme of closing power stations that are thought to be no longer economic. I do not believe that that is in any way connected with the report. I know the point that the hon. Gentleman makes. One of the issues that the consultants have to consider is whether existing power stations can be used in the districts under consideration. I do not believe that the point about which the hon. Gentleman expressed anxiety will affect the outcome.

North Sea Oil

Mr. Dykes: asked the Secretary of State for Energy when he expects to announce a new series of licence applications for North Sea exploration.

Mr. Lawson: I am today circulating in the Official Report proposals for a new eighth round of offshore licensing. The formal invitation to apply will follow in a few months' time.

Mr. Dykes: I thank my right hon. Friend for that preliminary answer. Is he confident that small British companies will have a fair chance of making successful applications when the round is promulgated?

Mr. Lawson: In today's climate some small companies may find it difficult to raise the finance needed to participate. However, I hope that a fair smattering of licences will be granted to small companies if, as I hope, they apply. Although some of the blocks will be offered by the auction method, for the first time since the fourth round over 10 years ago, the majority will be offered in the same discretionary way as in most previous rounds. That provides a balance between the interests of the larger and smaller companies.

Mr. Rowlands: Does not auctioning mean putting the new North Sea licences, and no doubt the prize licences,


into the hands of the multinationals once more? Does not auctioning mean going against the concept of development by small, independent British companies? Auctioning gives power to the big boys, but not to the small companies. How large is the licensed area likely to be in the eighth round? The right hon. Gentleman has not mentioned any acreage.

Mr. Lawson: The hon. Gentleman cannot have been listening with his customary attentiveness. I said that only a minority of the blocks would be offered for auction. I expect about 85 blocks to be awarded.

Mr. Skeet: Will the Secretary of State consider the suggestion of dropping the option of 51 per cent. for BNOC in this round?

Mr. Lawson: The arrangements will be precisely the same, for the reasons discussed in our numerous debates on the Oil and Gas (Enterprise) Bill.

Mr. Wrigglesworth: Is the Secretary of State aware that there is considerable anxiety that some marginal fields may not be exploited? If there is not a good response, will the right hon. Gentleman consider reducing the incidence of taxation to ensure that all marginal fields are exploited?

Mr. Lawson: That question has nothing whatever to do with the licensing round, although the hon. Gentleman may be interested to know that the majority of blocks on offer will be in the frontier areas of previously undrilled areas of sea round our shores.

Following are the proposals:
The main objectives are to open up areas in which exploratory drilling has not yet taken place and to provide further opportunities to explore in the established gas province.
I have in mind licensing in total about 85 blocks drawn from the following:

(i) a wide selection of blocks in the previously undrilled areas of Unst, Fair Isle and West Orkney Basins, East Shetlands Platform, Forth Approaches, Southern Sub-basin—entrance to Bristol Channel—and the mid-North Sea High—an area between latitudes 55° and 56° North;
(ii) a number of blocks between 53° 10' North and 54° 20' North in the southern basin of the North Sea; and
(iii) a small selection of blocks in the mature oil province of the central North Sea.
I shall be inviting cash tender bids for the blocks in (iii) above; all other licences in the round will be awarded purely on the basis of assessment against published criteria. These criteria will be broadly similar to those for the seventh round. An undertaking along the lines of that attaching to seventh round licences, to allow BNOC an option to acquire up to 51 per cent. of any petroleum produced, will be required.
I expect the closing date for the eighth round to be towards the end of the year. In the coming weeks I intend to discuss my detailed proposals with those involved. I shall welcome any views or comments from interested parties on the plans I have outlined, with particular reference to areas where they believe special care and attention in the conduct of exploration and development may be needed for environmental, fishing or other reasons.

Mr. Hannam: asked the Secretary of State for Energy what representations he has received concerning the effects of lower oil prices on exploration and development in the North Sea.

Mr. Gray: There is no doubt that lower oil prices have had an effect on licensees' plans for future North Sea developments.

Mr. Hannam: Does my hon. Friend agree that lower oil prices, higher levels of taxation, and the increased cost of development combine to make marginal fields much

more difficult to develop? Given the importance of our marginal oilfields for self-sufficiency in the 1990s, will my hon. Friend consult his colleagues in the Treasury to ensure that some changes are made in the tax regime to help the development of those marginal fields?

Mr. Gray: My hon. Friend has devoted much time to this subject and he will appreciate that taxation is only one of the issues involved in any discussion of developments within the North Sea. The postponement of certain developments in recent months has been due more to technical problems and the weak oil price than to the tax regime. However, I accept that the companies have always included the tax regime in their reasons. That is only natural, because they wish to focus attention on their problem with tax.

"Nuclear Energy—The Real Costs"

Mr. Stoddart: asked the Secretary of State for energy what is his policy towards the conclusions of the report of the Committee for the Study of the Economics of Nuclear Electricity entitled "Nuclear Energy—The Real Costs".

Mr. John Moore: All contributions to this important debate are assessed on their merits.

Mr. Stoddart: In that case I feel sure that great weight will be given to the report, particularly as the committee is under the chairmanship of Sir Kelvin Spencer, a former chief scientific adviser to the Ministry of Power. Is the hon. Gentleman aware that the report clearly shows that there is a great discrepancy between the findings of the report, the CEGB and the Minister's thinking on electricity prices? Is he further aware that it clearly shows that the production of electricity by fossil fuels will be much cheaper than production by nuclear energy? The hon. Gentleman should take that report into consideration when contemplating his future policy——

Mr. Speaker: Order. That supplementary question was much too long.

Mr. Moore: I hesitate to draw the hon. Gentleman's attention to the classic computer concept of "garbage in, garbage out." Obviously, I would not suggest that that applied to the report. However, the assumptions fed into the report will produce results. I should have thought that the CEGB's thorough and full statement of the case merited considerable attention, particularly as the CEGB has an obligation to concern itself with securing an economic supply for the consumer.

Mr. John H. Osborn: Will my hon. Friend bear in mind that in Sheffield the high cost of electricity is putting steelworks out of production because such costs make them uncompetitive with those supplied with cheaper electricity, whether that electricity is nuclear-generated from France, hydro-generated from France and Norway, or a mixture of both from the New World? Will my hon. Friend ensure that that is considered?

Mr. Moore: My hon. Friend is quite right to draw attention to the problems of industry pricing. It is important to remind the House of the CEGB's cost estimates for power stations in 1980–81. Hinkley Point B nuclear power station ran at a cost 22 per cent. lower than Drax, which is one of our best coal-fired stations.

Mr. Palmer: Does not the Minister agree that this somewhat pretentious report may make doubtful assumptions and, not surprisingly, reach wrong conclusions?

Mr. Moore: I very much appreciate the comments made by the hon. Gentleman, who has great experience in this area. Assumptions about coal prices, nuclear capital costs and very interesting assumptions about nuclear fuel cycle costs have been added together to produce what the report seemed to suggest was the required result.

Sir Albert Costain: When considering the costs of nuclear power, will my hon. Friend bear in mind that the cost of building a nuclear power station will be greatly increased if construction work begins before it has been properly designed? Will my hon. Friend ensure that designs are properly prepared before construction work is started, thus making the building costs economic?

Mr. Moore: My hon. Friend is quite right. The pre-design work is a key factor in successful construction. Governments of both parties have always said that the building of any form of power station to cost and time is crucial to its economic success.

Alternative Energy

Mr. Hardy: asked the Secretary of State for Energy if he proposes to maintain current levels of support for research and development in the field of alternative energy provision.

Mr. Mellor: As my hon. Friend told the hon. Member for Sheffield, Heeley (Mr. Hooley) on 31 March, I hope that in the current financial year my Department will be able to devote between £11 million and £12 million to research and development into renewable energy sources.

Mr. Hardy: Is not that serious and disturbing reduction in investment in research and development likely to cause grave anxiety and disappointment? Is the decision to reduce that investment based on the summary of advice from the advisory council dealing with such matters? If so, is the hon. Gentleman aware that it is suggested that there are serious irregularities surrounding that summary of advice, which should command urgent and serious Departmental attention?

Mr. Mellor: The hon. Gentleman seems to be implying that I have said something new today. On the contrary, I am saying what was said in a parliamentary answer nearly two months ago. While I accept that it is likely that the 1981–82 figures will show that we spent somewhat more that year than this year, I remind the hon. Gentleman that in 1977–78, during the period of the Government of whom he was a supporter, only £1 million was spent on renewables. During the last year in which the Government that he supported were in office, only £2·5 million was spent. He must consider the matter in that context.

Mr. Forman: Is my hon. Friend aware that what the Government propose to do in support of research and development of renewables must be about right at this stage? Can he assure the House that the Government will do everything possible to back wind energy, which is one of the more promising renewables, both onshore and offshore?

Mr. Mellor: I am grateful for my hon. Friend's question. I know of his interest in such matters. We had the benefit of advice from our advisory council on research and development. That advice was in clear terms, copies of which I have placed in the Library, and it is acceptable to the Department. The advisory council placed much emphasis on wind and we are financing, at a cost of about £7 million, a development windmill in the Orkneys to produce electricity.

Mr. Dalyell: Why is the alternative energy research unit at Harwell being run clown?

Mr. Mellor: I have no reason to believe that it is. We spent about £4 million last year on our energy development support unit and its work is highly valued. I assume that the hon. Gentleman is referring to that unit. I know of no such plans.

Oral Answers to Questions — HOUSE OF COMMONS

Select Committees

Mr. Dubs: asked the Lord President of the Council whether Her Majesty's Government have plans to make any further proposals relating to the work of Select Committees.

The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): The Government have at present no such proposals. The House has a comprehensive structure of Departmental Select Committees with broad terms of reference and extensive powers of inquiry. How these, and other aspects of the Select Committee system, now develop is primarily in the hands of the Committees themselves.

Mr. Dubs: Does the Leader of the House agree that it is illogical that the work of the Law Officers' Department should not be subject to scrutiny by any of the departmental Select Committees, thereby preventing the consideration of such topics as legal aid, the work of the Public Records Office and general matters dealing with the courts? Will he, therefore, bring proposals before the House that will enable the Home Affairs Select Committee to oversee the work of the Law Officers' Department, excluding such sensitive areas as the appointment of judges?

Mr. Biffen: I am grateful to the hon. Gentleman for telephoning my office this afternoon to give notice of his supplementary question, which would otherwise have bowled me neck and crop. I am now refreshed of the history of these matters. I am sure that the hon. Gentleman will reflect that on 25 June 1979 one of my predecessors, my right hon. Friend the Member for Chelmsford (Mr. St. John-Stevas), spoke on the subject and the House had the chance to debate and to vote on the issue. The House decided against the inclusion of the powers of the Lord Chancellor within the ambit of the Home Affairs Select Committee. However, I shall certainly look at the question and write to the hon. Gentleman with my views on the basis of a more measured reflection than I can give from the Dispatch Box.

Sir Peter Emery: I apologise for the fact that I have not given my right hon. Friend notice of my supplementary question. I have no desire to bowl him neck and crop, or even with a slow googly. Will he accept that part of his


statement is not entirely accurate, in that only two of the Select Committees have the power to appoint sub-committees? The development of the Committees could be limited by the decision of the House. If Select Committees wish to appoint sub-committees, will my hon. Friend consider that matter in due course?

Mr. Biffen: Of course I shall consider that matter, but there are 33 Select Committees and 14 departmental Committees. That makes a real demand on the resources available to the House. To the extent to which we appoint sub-committees, I have to consider that.

Mr. Palmer: Is the Lord President of the Council aware, to follow the point made by the hon. Member for Honiton (Sir P. Emery), that the work of the Select Committee on Energy, which has no power to appoint subcommittees—the old Select Committee on Science and Technology had unlimited powers in that respect—is being greatly handicapped?

Mr. Biffen: I have sufficient regard for the membership of the Select Committee to believe that it is able to adapt itself to the current arrangements and still be a powerful influence on the House.

Mr. Moate: In view of the few Select Committee reports that are meaningfully debated, the amount of time that they consume and their lack of influence, would not this be an opportune time to review the whole system, perhaps with a view to abolishing the Select Committee procedure altogether?

Mr. Biffen: I shall not be drawn that soon by so profound a question. I shall merely comfort myself by saying that inquiries into the Select Committee procedure have vindicated the Government's confidence in Select Committees. In all such matters, Select Committees will strengthen themselves by an evolutionary process. We should be pragmatic and cautious in both what we expect and what we require.

National Health Service

Mr. Roland Moyle: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the threatened day of industrial action in the Health Service called by all unions having membership in the National Health Service affiliated to the TUC for next Wednesday 19 May.
I am a sponsored member of the National Union of Public Employees, which is one of the unions that will take action. I and my family make regular use of the National Health Service, as do most people in Britain.
The problem is specific in that the TUC affiliated trade unions having membership in the National Health Service intend to withdraw their labour for 24 hours beginning at midnight tomorrow and continuing until midnight on Wednesday. The aim will be to reduce the National Health Service for that day, broadly speaking, to a nation-wide accident and emergency service. Surely every right-thinking person would not wish that to happen in any way. The action has been called against the background of deteriorating care and industrial relations in the National Health Service generally.
It is agreed on both sides of the House that the matter is important. The Government believe that it is important, because the Secretary of State for Social Services said on 21 April 1982:
Over the next weeks important decisions will be taken about industrial action in the National Health Service. The consequences of such action could be very grave.
Those important decisions have been taken and the position is very grave. I agree with the Secretary of State that that is the correct assessment of the position.
On top of that, the National Health Service was created by the House of Commons and therefore we have a responsibility to ensure that arrangements are made, through Ministers answerable to the House, for proper provision for our handicapped and sick. That is the danger. The head of the National Health Service is answerable to the House. We all have a duty to provide for the care of the sick and handicapped, and that duty may break down on Wednesday.
For those who do not rise to the challenge of duty and have grosser minds, I point out that the Health Service is an important institution that has an annual budget of about £12,000 million and a work force of about 1 million. That is a large commitment for the nation.
The matter is important, because the TUC has largely called the strike. That is unprecedented in my experience of industrial relations. Technically, of course, the individual unions have called the strike, but the TUC has co-ordinated the action. That is exceptionally important because normally the TUC, while not wishing to be impartial in such matters, adopts a one-off approach to disputes in order to maintain its role as an independent negotiator, if necessary. On this occasion it has departed from that normal stance and, whatever the technical and legal arguments, Wednesday's strike will be promoted by the TUC.
The matter is urgent because the action is due to start at midnight tomorrow and 10 continue for 24 hours. There is no possibility that the decision will be reviewed and retracted before the action takes place unless the House takes action. This is not time to argue the case for the employees' claims, but the Government have offered an increase of 4 to 6·5 per cent., and employees want a 12 per cent. increase. It is a large gap.
Against the background of those figures, only the most supine and ineffectual group of public workers would wish to accept such an offer without making the maximum possible demonstration, with inflation not yet in single figures. National Health Service employees are neither supine nor ineffectual——

Mr. Speaker: Order. I have allowed the right hon. Member for Lewisham (Mr. Moyle) to go some way, but he knows that he must not make the speech that he would make if I were to grant the application.

Mr. Moyle: I take that point, Mr. Speaker. I am sire ply trying to demonstrate briefly that feelings are strong on this matter and that unless the House takes action we shall have trouble in the National Health Service within 48 hours.
National Health Service employees are neither supine nor ineffectual, and, in those circumstances, they may be said to be setting an example to Britain. A debate tomorrow, if you are disposed to grant it, Mr. Speaker, would allow time for the Secretary of State to come to the House and outline proposals that might lead to the calling off of the industrial action. It would give a strong sign to National Health Service workers that their case was attracting attention in the highest quarters, and any irresponsible action by some of the less responsible elements that there may be in the Health Service would be moderated. If no such action is taken, Wednesday will be followed by similar days of action.
I hope that I have shown that the problem is specific, vitally important and critically urgent.

Mr. Speaker: The right hon. Member for Lewisham, East (Mr. Moyle) gave me notice before 12 o'clock midday that he would seek leave to make an application under Standing Order No. 9. The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the threatened day of industrial action in the Health Service called by all unions having membership in the National Health Service affiliated to the TUC for next Wednesday 19 May.
The House will have listened with concern to what the right hon. Gentleman said, and there is no doubt that he has drawn our attention to a very important matter. However, the House knows that it has given me instructions under Standing Order No. 9 that I must take into account the several factors set out in the order bur to give no reasons for my decision.
I listened very carefully to what the right hon. Gentleman said, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Argentina (European Community Sanctions)

Mr. Tony Marlow: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing specific and important matters that should have urgent consideration, namely,
the implications of discussions with the EEC on trade sanctions against Argentina and related matters.
The whole House—indeed the whole world—knows that the task force in the South Atlantic is acting in defence not of British interests but of world peace. It is a British problem. It is also, of course, a European problem. For that reason the European Nine joined us in trade sanctions against Argentina. Yesterday a decision on their extension was delayed. Today further discussions are taking place.
We who are bearing the burdens of the free world are being put on probation. For this reason the House may wonder why, at a time when we should be given maximum and enthusiastic support, we are being blackmailed by our reluctant allies into making concessions on other and unrelated matters.
It is vital that, before any decisions are made in Europe, other European nations are made aware of the views of the House and of the nation. Otherwise, mistakes could be devastating to European unity. Some decisions may be made tonight, or even tomorrow. The debate should, therefore, take place as soon as possible.
The following specific matters must be discussed urgently. First and foremost, we must discuss the safety of our Service men. There must be a danger that, with the present negotiations, the operational options will be rearranged to fit in with the perceived requirements of European diplomacy. The lives of our troops and sailors could thus be placed in jeopardy. The House may wonder for what—for sanctions that are notoriously evadable, for sanctions which, historically, refuse to bite?
The House will also wish to discuss another specific matter—the danger of blackmail. Are we to trade a budget deficit several times the cost of the task force for this ephemeral, conditional, grudging and yet physically empty gesture?
The House will certainly wish to discuss another specific matter—whether we are to agree to a massive increase in farm prices and further to burden and browbeat the British consumer for what could be a diplomatic doormouse. The debate is happening today in Brussels. The House will also want to debate, before the die is cast, the sham of European solidarity and the reality of national self-interest, so that we can give a clear signal to our Government, this very day, in their pursuit of our interests.
Finally, I believe that the House should insist that in any package that is agreed a large tranche of European funds must be available for the task force, defending as it is European interests. No package should be acceptable to the House which continues to give 75 per cent. of European funds to European agriculture while ignoring this new and far more urgent European priority. These matters are urgent. They are happening this very day. They effect what is happening in the South Atlantic. They are fundamental. The House must debate them now. Tomorrow may be too late.

The Speaker: The hon. Member for Northampton, North (Mr. Marlow) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the implications of discussions with the EEC on trade sanctions against Argentina and related matters.
The House will have listened with considerable care to what the hon. Member said. He knows that I have been instructed under Standing Order No. 9 to take into account the several factors set out in the Order but to give no reason for my decision.
I listened with care to the hon. Gentleman, who is dealing with a matter of great urgency, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

WELSH AFFAIRS

Ordered,
That the matter of Education and Training in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for their consideration.—[Mr. Gummer]

Job Prospects

Mr. Barry Henderson: I beg to move,
That this House believes that job prospects will be improved if British businesses act with greater urgency to grasp the unprecedented opportunities for growth presented by developments in several fields of advanced technology; and urges Her Majesty's Government vigorously to pursue its policies to remove obstacles to growth and stimulate the development and use of new techniques and products.
I hope that the motion will commend itself to the whole House, although I accept that there is scope for controversy in some of the matters that are relevant to the motion. I seek to draw three main elements to the attention of the House. The first is the assertion that the exploitation of new technology will improve job prospects both in quality and in quantity. The second is a call for greater urgency by industry to assess and grasp the rapidly developing opportunities. The third element is a call to the Government to take further action to remove obstacles to potential growth.
I welcome the presence of the Under-Secretary of State for Industry, my hon. Friend the Member for Coventry, South-West (Mr. Butcher) on the Government Front Bench. Not only is his rapid promotion well deserved, because of his personal merits, but, with his practical experience in computers and information technology, his advancement is a great encouragement to all who see the vital part that those industries play and will play in the future of our country.
Many aspects of advanced technology are relevant to the motion, not least biotechnology and aerospace. I shall concentrate my remarks on the aspect that I know best—information technology. I declare an interest. Most of my working life has involved computers and their applications and I am a member of the British Computer Society.
It is helpful on occasions such as this to be clear about what we mean by information technology. It is interesting to note, even in the relatively short time of this Parliament, how the definition of information technology keeps changing subtly. The reason is that different aspects of developing technologies have increasing significance as time goes on. Perhaps of most significance is the convergence of a variety of technologies, such as computers, telephones, television, and the use of microelectronic techniques generally. Recently, the importance of these technologies growing together has been further emphasised by the concept of wide band cabling, which enables all those facilities to be connected to one another in one pipeline.
In history, and in prehistory, most of the great civilisations grew from a type of communications system. In the earliest civilisations that communication, typically, was created by a river bed. The river itself provided a means of communication. At other times the sea, roads, railways and telegraph were the means of communication. Many civilisations were based on slave labour. When we study the immense part that communications systems have played in the development of any society, and the enormous growth and improvement in those systems since the last war, we cannot fail to be impressed by the important potential that they have for economic development and economic power, and even military

power, and for the whole spread of human knowledge. We cannot afford to ignore the significance of communications. We must use them to build a civilisation without slaves, where man remains master of the machines.
It is difficult to express the sheer scope of growth that exists in the possible development of the technologies to which I draw attention. At one end of the scale it is concerned with satellites. At the other end it involves telephones and simple bleepers. It involves improved terminals to communications systems. It also involves television sets and concepts of the type now evolving for offices of the future.
What is not easy for most people to grasp is the sheer impact that cabling systems of the future will have. British Telecom alone plans to spend £2,500 million a year and more in upgrading and maintaining the basic existing telephone network. In addition, there is enormous scope for cabling for a variety of other purposes. The spread of cables throughout the land will be on a scale and with a rapidity that has not been seen since the growth of the railroads in the early nineteenth century, and perhaps matched only by the spread of electricity during this century. The first part of my motion is concerned with job prospects—a matter that is of fundamental concern to the House at this time. One of the ways in which we deal with many of the problems will be found by grasping the opportunities presented by new technology.
One of the most useful sources of data is a report from the Policy Studies Institute, which, towards the end of March this year, published the results of a survey in 1981 of 1,200 manufacturing companies. Under the heading:
Fears of massive redundancies seldom justified
it said:
Process applications tend to result in job losses, but usually losses small enough to be absorbed by natural wastage and redeployment. Product applications tend more often to bring increased market share and job gains, and the greater risk to jobs will often be from the reduced market share that could follow from not using microelectronics when competitors are going ahead with it.
While, in the short term, process applications—where microelectronics are being used to assist in the process of manufacturing—may reduce employment prospects in affected firms, two factors must be set against that. First, without the increase in efficiency and productivity the firms concerned would be liable to decline against their competitors in any event. That in turn would lead to even greater job losses than might occur through the use of the technology, but, by becoming more efficient, they may well enhance their share of the market, and therefore the increased production would counterbalance the reduction in the number employed on each item of manufacture.
Secondly, the scope for more jobs in the new and expanding firms that supply the new equipment and techniques can grow even more than the losses in the traditional manufacturing areas. What is clear for job prospects is that where firms use new techniques and microelectronics in enhancing their products, that is almost invariably accompanied by increased market share and more jobs.
Even in my constituency, which outsiders often think of as a delightful rural area dominated by agriculture, fishing and tourism, with a fine university and the world's most famous golf course, at St. Andrews, there is evidence of the trends to which I refer. In the past three years I have watched half a dozen firms come into existence or grow, moving into manufacture and/or services in the mini and


microcomputer field. Many of my constituents who work in Dundee and Glenrothes are pionering in world markets. In many cases, these are new companies which have spun off from some of the multinationals which have settled so successfully in the area.
One new development that came to my attention this month was the birth of a new medium of communication, a publication called Innovation. It is a register of new ideas, mainly created in the universities, which are being distributed to industry generally. I have been in touch with my constituent who founded the firm that set up this register. As a result of its first circulation to thousands of firms in the three weeks since its launch, 40 per cent. of the ideas mentioned in the register—it is about ¼ inch thick—have been followed up by one or more companies. Obviously not all of the ideas followed up will necessarily result in a new product or development, but it is an encouraging indication that, when new ideas are presented direct to people who can make decisions, industry is willing to have a look at them and see whether they can be used. We must build on that because, unfortunately, not all of the picture is as encouraging.
Scotland is a major world centre of the microelectronics industry. Outside California it is possibly the largest single concentration of that industry. To many hon. Members Scotland may be more famous for fish and chips than for microchips, but I believe that we are now the major European producer of microchips. That is encouraging significant spin-offs from the fundamental industries, many of which came from other places.
Industry's grasp and reception of the opportunities that present themselves is very mixed. At one end of the scale there are some of the most innovative and advanced companies in the world, but there are others that are all too disappointing.
I should like to examine some of the companies that have been most directly concerned with some aspects of the new technologies—those companies that form part of the Telecommunication Engineering and Manufacturing Association Ltd. In its recently launched first news letter—which presumably means that there will be more to follow—TEMA said that
combined, the turnover of the telecommunications element of these companies"—
those that form part of its organisation—
has risen from £600 million in 1975 to 1,020 million in 1981.
At first sight that is quite impressive, but when one appreciates what has happened to inflation over that period, it is not so impressive. It suggests that those chaps are holding their ground in their areas of business, but I am not convinced that it means that they are really expanding in the way that they could if they were to take full advantage of world markets. They have the talent and the technology to capture a much greater share of the world markets.
As someone who believes that the greatest prospect of development in these areas will come from the private enterprise system, I find it deeply depressing that a company such as GEC prides itself on cash balances of over £500 million, but does not seem to be able to think of any way of spending it in the industries in which it is pre-eminent. GEC is involved in a significant range of activities that are central to information technology. At a time when countries throughout the world are finding new

products, new methods and new ideas which they can develop and expand, and in some cases corner the market, I find it depressing that one of our greatest industrial companies does not seem able to find ways of profitably investing its substantial resources to that end.
Even the best of our companies—there are many good ones—must think about growing fast enough to increase jobs to counterbalance those that have been lost in their own companies or elsewhere. The TEMA companies—it is only a small subset of those involved in information technology but a significant one—say that we are moving towards a period of capital intensive development that will be intensive in manufacture. This change is reflected in declining manpower levels in the industry. There has been a reduction from 90,000 in 1971 to 48,500 in 1981. Changes in technology have decreased job prospects. No doubt they have enhanced the quality, but they have certainly decreased the quantity. The scope for development is such that the companies concerned could more than compensate for decreased manpower levels by creating growth in their total business.
More depressing than the potential supply of certain products is the response of potential users to microelectronics. In the Policy Studies Institute report to which I referred earlier it is said that non-users acknowledge that the scope is not being exploited and that
if half the sample are using microelectonics or trying to, at least in some degree, the other half are not … Half the non-users themselves agree there is scope for applications in their kind of business—yet they are not using any, they are not developing any and they are not even planning to do so in the future.
That is an awful indictment of some sectors of manufacturing industry.
The Wolfson institure of Edinburgh university, which together with Heriot-Watt university, the Royal Bank of Scotland and the Scottish Development Association, is running Integrated Micro Application Limited, has found that the recession has to some extent had an effect on the psychology of industrialists. It appears that there has been a tendency for them to keep their eyes down, to batten down the hatches and to try to ride out the storm of recession with their eyes shut. That is perhaps overstating the reaction——

Mr. Bob Cryer: I think that the hon. Gentleman is understating it.

Mr. Henderson: It is a mixed picture. However, more industrialists must raise their sights and find time to plot the growth that will ensure the survival of their companies at least and, better still, buck the trend of the past. If they do not grasp the opportunities that are presented by new technology, perhaps even more in the enhancement of products than in manufacturing processes, they will undoubtedly experience difficulty. If they grasp the opportunities, that will stand them, their shareholders and their employees in good stead.

Mr. Tam Dalyell: I recently visited the Wolfson institute. Does the hon. Gentleman agree that it is an uncomfortable fact that whereas grants are relatively easily available to incoming firms—even to Nippon Electric, which is coming to my constituency—they are not so easily available to established firms that have been in an area for some time? Recently the Scottish Labour group visited Motorola and IBU. The members of the


group were told that established firms find it relatively more difficult than incoming firms to get grants. Does the hon. Gentleman agree that that is unsatisfactory?

Mr. Henderson: The hon. Gentleman has raised an issue that has caused me some anxiety for a number of years. It is not a party political point, because the central problem has been with us for some time. The difficulty to which he refers is greatest where a company changes the way in which it does business, perhaps within the same factory space, and when it is not able to say "We are increasing the number of jobs by X and, therefore, we are entitled to a range of assistance from public funds." The firm may be reorganising and protecting jobs that would otherwise be lost, and at the same time improving the base from which job prospects can grow. To a degree, I share the hon. Gentleman's view.
I should like to hear more from the Government about removing obstacles to growth. Responsibility for developing new techniques and new products must come from industry, but the Government have a major part to play in removing obstacles that might lie before it, and the hon. Gentleman has mentioned but one, although in a rather different area from the one to which I shall address myself.
First, I am concerned with the definition of the environment—I mean not the physical environment, but the rules of the game within which the liberalisation initiated by the Government can develop and grow. I understand that there have been substantial modifications to the early regime that was published, but, unfortunately, there has been no up-to-date redefinition of the environment and the way in which the Government see it evolving. there have been substantial changes in outlook and the benefit of experience in areas where that will help.
Arising from the Government's actions in liberalising the telecommunications regime is the issue of standards. The development process and standards are said by some to lack firm control. So far no new standards have been defined and only two have reached the comment stage. This suggests that the means by which standards are identified and defined are rather too complex.
When firms want to be able to supply products that comply with standards, there has to be authentication. The Government should perhaps consider more seriously the concept of allowing firms to state that their products comply with specific safety regulations and particular standards, giving them the responsibility of satisfying their customers that these standards have been achieved on the understanding that if they do not they will be subject to heavy penalties, rather than in every case requiring a company to prove that a certain standard has been met, when many of the standards may not be concerned with the business of a regulatory authority, which clearly must be concerned with basic safety.
It has been put to me that many of the prospects for growth in value added network servics are being frustrated by the specific licensing system. There is an argument for moving to a general licence which provides that one may use value added services and British Telecom's network for any legitimate purpose instead of applying for specific licences. It is suggested that the licence should permit the public network to be used generally for legitimate purposes and that it should be made impossible to use it for activities that are not wished to be undertaken by means of the network.
On the front page of today's Financial Times there appears an interesting story that suggests that my right hon. Friend the Secretary of State for Industry is thinking along the lines of a report submitted by British Telecom to the Government last week that the organisation of BT should be given overall responsibility for laying all new cable systems to carry cable television programmes, computerised information services and video communications. Presumably it expects to be given responsibility for telephone communications as well. At the other end of the scale we are told that the technology advisory panel—ITAP as it is known—has argued that the private sector should have free range to lay cable systems. I am somewhat torn between them. I am not sure that either is the only solution.
We have arrived at a crucial matter of principle and policy for the development of information technology. Even if it takes a few weeks—I hope that it will not take much more than a few months at worst—I believe that there is a potential obstacle to growth unless the Government, and possibly the House, come down quickly as to the way in which the cabling networks are to develop and what the physical environment and the rules of the game for organising them will be. I want to emphasise my view that the use of the networks should be seen separately from their provision. One organisation might do both, but that need not necessarily follow.
I believe that awareness of the opportunities in information technology and the creation of demand by users still has a long way to go. I believe that part of that can be done by straightforward education, some of it by training and some of it by induction by whatever means, or even exhortation. I believe that the speed with which change is taking place almost outpaces the substantial improvement in awareness over the last year or two. That awareness relates also to job prospects in the sense of what people know about the possible scope for jobs. More people would go into that field if they knew that it existed. It comes back to career advice at school. It requires improvements in how the education people, whether at school, further education or university, keep in touch with the developments that are taking place in the wider world.
We should be aware that not all other countries have taken the same approach to the liberalisation of their telecommunication bases as we have, I believe rightly. It gives this country a great opportunity to develop the techniques and products that will follow from that liberalisation, but other countries are not following the same kind of liberalisation. I believe that we should ensure that there are not equal opportunities to compete for PTT business in this country for companies from countries where our firms are not allowed to compete for such business. I am basically a free trader, I should like to see no such restrictions on trade, but if a country prevents others from bidding for their contracts on a simple straightforward basis, their companies should not be permitted to bid for ours.

Mr. Cryer: I am glad that the hon. Gentleman is endorsing planning, trade or import controls. Can he explain one of the difficulties to which his speech has given rise? First, he talks about the wonderful policy of what he calls liberalisation. I take it that he means selling off the profitable parts of British Telecom to the friends of the Tory Government. On the other hand, a little earlier he complained about the private sector battening down the


hatches, not having any vision and not being able to develop because of the recession that the self-same Government have brought about. How will the selling-off process be a developing process if the private sector that he is relying on is in fact retrenching and not developing?

Mr. Henderson: I am afraid that the hon. Member for Keighley (Mr. Cryer) allows his prejudices to blind him to the realities and experience of the past. He must know—it probably happened in his constituency, as it did in mine—that when I was elected in May 1979 many people were waiting 18 months for a telephone. Few now have to wait more than a few weeks. That is just the sniff of the possibility of competition. The importance of what the Government have done by liberalisation is not the act of selling off any part of the public industrial infrastructure; it is what they have done by permitting others to offer those services. That is the most significant development.
I believe that that will ensure that there are many sources of technical and commercial competence. Perhaps even more important, there will be enthusiasm and risk-taking to take advantage of the opportunities that unfold and not to leave them simply to the internal processes of British Telecom. However well-intentioned it may be, there are other sources of initiative and intelligence in the world—thank God, much of it in this country. I believe that that process is much more important than precisely who is involved. I have no objection to part of the operations being done by the public service, but I believe that the greatest opportunities will arise from the greatest amount of private initiative being taken by as many people as possible, including British Telecom.
I hope that my hon. Friend the Under-Secretary of State for Industry will report progress on a number of initiatives taken by the Government to encourage the advance of information technology. I hope that he will say something about the effect of the CB legislation that has gone through the House. Perhaps he can help me with one local point, of interest. When our hon. Friend the Minister for Industry and Information Technology announced that a second wave of microtech centres was being considered I suggested that an excellent place for one of them would be in Fife. Can my hon. Friend tell me whether there has been any progress towards establishing such a centre in that area?
The micro processing of application projects was, I believe, one of the best initiatives of the previous Government. I am glad that the Government have built substantially upon that initiative, but I believe that the initial project is due to run out during the next year. I hope that my hon. Friend can confirm that the Government see a continuing need for that project and that a more developed scheme can be expected, possibly with greater emphasis on telecommunications than in the earlier one, when more emphasis was placed on processing.
I hope also that as part of the business of making more people aware of the opportunities in information technology the House will set an example. I spoke at some length on this subject some time ago, and I shall not repeat what I said. I hope that we shall hear from the authorities of the House something about the progress of the Library

indexing system and the word processing developments that have been taking place, perhaps principally in the Clerk's Department.
When it comes to the type of facilities which hon. Members can use I have come to the reluctant conclusion that it is almost impossible to do a work study project on a Member of Parliament—never mind a group of Members. I say that having tried to do it without much success.
I have concluded that we need a pilot project in which a number of hon. Members on both sides of the House might participate to see whether we might make better use of some of the areas of information technology. I do not believe that we want to involve a vast number of Members initially, because many will not want to know about it. I think that some do, and I believe that many of us feel that there is scope, particularly in message handling, information provision and the searching for information for those techniques to be helpful. I hope that it will be possible in the foreseeable future to get such a project off the ground. Such a project among a limited number of hon. Members could produce statistics about the use that hon. Members would make of new technology, and that would give us some idea of the cost-effectiveness of such techniques.
We have seen an explosion of technical and commercial possibilities. Britain leads in many of the relevant areas and we are capable of developing internationally at the front of many others. Many of our suppliers have been extremely competent, but we need to emphasise to all our suppliers that they must keep thinking internationally and should not look for only a narrow, cosseted safe market at home. Potential users still have much to do to provide the demand that would ensure better services and supplies.
I address myself particularly to the top management of companies. They may be anxious and working hard to keep their companies going through difficult times, but if they are concerned with the long-term development of their companies they must find the time to look at the new prospects around them and to make sure that they are informed of what they can do for their firms.
My plea to the Government is that they should increase the stimulus for the development of new techniques and that they must recognise the central role that information technology will play in industrial and commercial regeneration. I hope that we shall not regard new technology merely as a new way of solving old problems, useful as that may be. I hope that we will apply even more imagination to seeing how we can improve the lives of people everywhere in ways that have never before been imagined.

Mr. John Grant: I congratulate the hon. Member for Fife, East (Mr. Henderson) on bringing an important subject before the House. It is a pity that there was such a sparse attendance for his constructive contribution.
Any supporter of a Government who have adopted policies that are primarily, though not entirely, responsible for the obscene level of unemployment is in a rather delicate position when talking about job prospects. However, the hon. Gentleman walked the tightrope with considerable skill and at least he did not fall off.
The hon. Gentleman did not suggest, and I hope that no other hon. Member will suggest, that the alarming and rapid rise in unemployment is due, to any major extent, to the implementation of new technology. That is not true.
The hon. Gentleman mentioned many of the important new technologies, but microelectronics—the silicon chip—is the most far-reaching, not least because few industries and jobs will not be affected by microelectronics, and the silicon chip will also have a major effect on our domestic lives.
Above all, we must reject the view of the pessimists that new technology will inevitably lead to' permanent mass unemployment. We cannot accept that. I agree with the hon. Member for Fife, East that we have to learn to harness the new technology and exploit it, not only to stay competitive, but to secure a better quality of life, including working life, for all our people, higher living standards and more leisure through acceptable—I stress "acceptable"—work-sharing measures.
There will be dramatic changes in the industrial and social life of our nation. Some jobs will disappear as a consequence of the new technology and many demarcation lines between jobs will have to go as old jobs become obsolete. But new jobs and new wealth will be created by the adoption of new technology.
I wish to consider the manpower implications, because it is crucial that the Government, managements and trade unions understand those implications. We must consider not only the direct effects on employment and unemployment, but the methods of implementation. We cannot afford to miss the opportunities for development and I agree with the views expressed in the motion.
However, I underline the necessity to secure change by agreement. That is crucial. There is an increased tendency in British industry towards greater participation and involvement in the decision-taking process at the place of work. That trend is not moving fast enough, but it is taking place, as we see from many of the agreements being made in British industry.
The SDP has tabled an amendment on industrial democracy for tomorrow's Report stage of the Employment Bill. That way forward will greatly assist the introduction of new technology, but whether or not statutory requirements are imposed, managements would be ill-advised to seek to impose technological changes. They have to be introduced with careful consultation and communication with employees and with the most detailed consideration of the consequences for job security, pay structures and working conditions, including health and safety matters, which are extremely important.
It is no use planning in the boardroom stratosphere and talking about marketing, the technicalities of the exercise and the financial rewards, while failing to consider the most important resource in any undertaking, which is the human resource. Any undertaking, whether in the public sector or the private sector, that falls down in that respect will deservedly hit trouble.
I shall not take the time of the House by going into detail on many of the issues that we could discuss, such as the redesigning of jobs, retraining, redeployment, the effects on bargaining structures, wage and salary levels and so on. However, it is no good pretending that job losses will always be avoided. The hon. Member for Fife, East did not make that mistake.
I hope that sensible firms will follow the example of those that have agreed employment security policies,

under which companies and trade unions give undertakings that help to minimise the problems and strike fair and realistic bargains. If the undertaking has good labour relations to begin with, it is halfway there. It will operate in an atmosphere of trust and openness. I hope that in the debates in the House over the next couple of days that attitude will be taken on board more than appears to have been the case hitherto. We do not want counter-productive legislation in this important area.
The hon. Member for Fife, East only brushed across another important area—training and retraining. Old skills will become obsolete and new ones will be needed. There must be a major training effort by the Government and industry and we need specialist skills to take full advantage of the technological breakthrough that we hope will take place.
Two years ago NEDO reported a huge shortfall in computer-related skills and expertise in many other technologically based occupations. I understand that the position has not improved much since that report was published. Many firms are too often unwilling or perhaps unable, especially during the present recession, to do the necessary training. It is, therefore, all the more regrettable that the Government have wrecked the industrial training board system. I do not necessarily suggest that changes were not needed but the way in which the Government have gone about it hardly demonstrates their genuine concern for the country's technological future.
The Manpower Services Commission has recently published its task group's report on training. In part one it says:
Prosperity and growth require invention, innovation, investment and exploitation of new technologies. They require the exploitation of new and growing markets to replace those that are declining. They require standards of production and service every bit as competitive, effective and reliable as those of our competitors.
This cannot be achieved with an under-qualified, under-trained or immobile work force. It cannot be achieved if people resist change or cannot cope with it. Increased productivity means doing new things in new ways. This will require training and for young people entering work it requires proper vocational preparation.
Those changes have been agreed by the TUC, the CBI and other represented interests. It is unfortunate that, in spite of that, the scheme appears to remain in some jeopardy because of the obduracy of the Secretary of State for Employment who seems to want to introduce an element of compulsion. He does not like that word. Perhaps I should say coercion. He cannot quibble with that. It seems that everyone except the Secretary of State is out of step on the matter.

Mr. John Watson: The element of compulsion to which the hon. Member for Islington, Central (Mr. Grant) refers is the provision in the scheme whereby a young person who does not wish to take part in the scheme should not therefore be eligible for any type of social security benefit. If we allowed a young person to be so eligible, there would be a contradiction, in that someone of full working age, who was perhaps offered an interview for a job but declined to go, would be ineligible for social security benefit. Following the hon. Gentleman's argument, the young person in those circumstances would be eligible. Is he suggesting, as a general principle, that a member of Society in Britain should have a choice to remain unemployed?

Mr. Grant: That is not what I am saying. The hon. Member for Skipton (Mr. Watson) should read the task group report. It points out that employers, trade unionists and educational interests all say that the change is not desirable. It is a change. The benefit to young people of Government schemes is not dependent in the way that the Secretary of State now apparently wants to make it. I hope that the Minister will take note of that. He knows that the Secretary of State takes a self-righteous and self-justifying attitude in the House that threatens to undermine the major step forward for young people. The scheme is by no means the end of the road. We want to see much develop from it. It is, nevertheless, a major step forward. The Government have it in the palm of their hand to achieve the co-operation of industry and the co-operation and support of all hon. Members. The Minister should tell the Caxton House Galtieri to back down in the interests of everyone, especially young people.
I shall now deal with shorter working time. I know the arguments about higher costs. Workers are understandably reluctant to share wages and salaries to increase the number of available jobs. Extrapolating from one undertaking to the nation, one cannot cut the hours of working without the risk of reducing competitiveness and, therefore, the number of jobs. We must also recognise that the equation is not simple. If it were, we would still be working 50 or so hours a week as we did at the beginning of the century. Some 50 per cent. of manual workers now work a basic 37 hour week or less. Other major industries, engineering for example, work a basic week of 39 hours. There are countless other examples. That process is true of other countries. There, the trend is in the same direction, and they face similar problems—competition especially. But if we are not to be the pace-setters we should not be the laggers. Although new technology might increase unit costs for the reasons that I have mentioned, if offers a means of cutting them and prices and, therefore, of increasing productivity.
There are many permutations of shorter working time that should be examined more seriously than before. We could consider the nine-day fortnight instead of the four-and-a-half-day week. That approach would be advantageous both to employers and employees. There might be longer holidays, sabbaticals, voluntary early retirement—I stress the word "voluntary"—and we might deal with the vexed question of controls on overtime. Even in the present recession, much overtime is worked in some industries. That is worrying both employers and trade unions. No one is sure how to solve the problem. Perhaps it should be done on an industry-by-industry basis. Some countries have imposed legislative controls.
I shall quote from a document produced by the TUC as a result of a conference on unemployment and working time. It says:
Only by giving greater priority to job security, job creation, reduced working time, greater leisure and more general improvements in the quality of working life can the climate be produced in which technological change is welcomed by workers rather than seem simply as a threat to jobs to be avoided at all costs.
That is an unexceptionable statement. Most people would support it. It seems evident that manufacturing industry will become more technological. The trend has started and is strong. That is not necessarily a bad thing. Examining the record of agriculture, in 1800, 36 per cent. of the working population were on the land. That figure is now less than 3 per cent. No one would deny that agriculture

is a highly productive and important industry. The big switch has been to manufacturing industry. The next big switch, which the statistics show is already happening, is from manufacturing to service industry. No one can assert that there is little to be done in either the private or the public sector.
Service seems to be a dirty word in Britain. That attitude must change. One does not hear the phrase "public squalor" used much now, but there is still plenty of it around and there is massive scope for job creation in the service industries. New technology can help to provide much of the wealth that is needed to enable that process to take place.
We desperately need economic growth. We need the right climate for technological change to take place. That does not mean more of the same old public spending cuts that the Government are introducing. Nor does it mean widespread import controls or withdrawing from the EEC—the formula advocated by the official Opposition. Both views are little short of counsels of despair.
To inject a quick constituency note, unemployment in the borough of Islington, part of which I represent, has risen by 25 per cent. since the Government took office. My constituency is now part of a major unemployment black spot, with 21·8 per cent. of the economically active population out of work. That rate of unemployment is higher than in any other London borough. It is frightening and scandalous. Even so, I can find a bright spot. This week, the local papers reported that we have 70 firms that specialise in information technology in the borough. That must mean jobs. It must be good. However, the conditions in my area are not such as would lead one to expect cooperation over the introduction of new technology.

Mr. Kenneth Carlisle: How many jobs have been lost in Islington as a result of the high level of rates?

Mr. Grant: I do not think that it is possible to give a figure, but there have probably been quite a number. Even more, however, have been lost as a result of the general recession. Although it is difficult to arrive at a figure in relation to the level of rates, there are figures for overall redundancies. From my experience in talking to employers, I have little doubt that the recession rather than the rates has been the greatest problem, although one cannot deny that rates in the borough have been a considerable factor.
I mentioned earlier the link between jobs and incomes. I believe that politicians of all parties have failed the nation in the redistribution of incomes and wealth in this country. The Government still believe in a private sector free-for-all and arbitrary public sector curbs. The official Opposition cannot even bring themselves to mention incomes but hide behind phrases such as "national economic assessment". It is hypocritically selective to avoid upsetting supporters who will not face the economic truth about the role of wages and salaries in our society today.
Having failed to deal with the fair redistribution of incomes, we must try hard to avoid a similar failure in what I regard as the necessary redistribution of work, which I believe must take place if we are not to continue to be a nation of haves and have-nots in regard to work. Dealing with this problem will mean taking on some very deep-seated vested interests and it may be every bit as hazardous as dealing with incomes.
The real message to the Minister is that no Government can stand on the sidelines in this. I therefore welcome the motion and I urge the House and the Government to recognise what I regard as one of the most fundamental and disturbing but at the same time essentially exciting aspects of both economic and social policy. In the inevitably difficult years ahead, I hope that the Government will begin to measure up to the requirements in this respect.

Mr. Kenneth Carlisle: I welcome the debate and I congratulate my hon. Friend the Member for Fife, East (Mr. Henderson) on providing the opportunity to discuss this subject. I certainly recognise that his knowledge of the subject is far more exact than mine, as he has worked in information technology.
The subject that my hon. Friend has chosen is highly relevant at this time of high unemployment. We must recognise that we can protect jobs only if we use advance technology to the utmost of our ability. As an industrial nation, we must be in the vanguard of technical and technological development. The consequences of not doing so are clear in the history of the shipbuilding industry. At the end of the war, Britain had about 43 per cent. of the world market for ships. We now have less than 3 per cent. We lost our share of the market not because we grasped the new technology but because we failed to make the most of modern technology. Our methods of building ships did not progress as fast as those of our major competitors in Japan and elsewhere. Nor did our working practices match the challenge. The simple result was that we lost the market because we did not keep abreast of developments elsewhere. If we are to save jobs, we have no choice but to become as modern as we can, as fast as we can.
That gives the lie to the claim of the hon. Member for Islington, Central (Mr. Grant) that the Government are to blame for the loss of jobs. The overriding and most fundamental reason for the loss of jobs is that over the past 30 years we have ceased to be competitive with other countries. As a trading nation, exporting about one-third of all that we produce, we have no option but to remain competitive if we wish to save jobs.
It does not follow that advanced technology must necessarily destroy jobs, as is so often claimed. That was certainly not the case in the past. In the eighteenth century, there were about ¼ million carters in the United Kingdom. When railways were invented and built at the turn of the century, the carters were fearful that the new railway would destroy their jobs. In the 20 years that it took to build the railways, however, some 2 million workers were employed on this gigantic task of civil engineering, and after the railways had been built some ⅓ million were employed to run them in their heyday. Yet there were still a ¼million carters, cab drivers and bus drivers plying to and from the railway stations. In other words, the new technological advance of the railways released and gave rein to the latent demand for travel and trade.
Despite the technological changes of this century, there are still twice as many men in work in Britain today as there were 100 years ago. In the past century, technology has created rather than destroyed jobs. Therefore, there is no reason why new technology should not also work now to release a whole new range of jobs. Of one thing we can be absolutely certain. Jobs will be destroyed if, as a nation,

we are not in the forefront of that technology. We must decide how we can successfully retain progress at that frontier.
I believe that there are three basic areas in which we must succeed. First, there is a duty upon Government to provide the correct framework within which we operate and to assess the right level and direction of help For example, the Government have a duty to see that the economy is kept right. Only if inflation is reduced to a realistic level and profits are there to invest can we have the confidence in the future and the money to invest in the new technology.
The Government must also assess the right level of Government assistance. It is nonsense to believe that they have no duty to provide some help for investment and research in the new technology. Certainly, that has been the plan so successfully followed in the sunrise industries in Japan and also in France. The problem is to promote the right kind of help in the right direction. I understand that about £3,000 million per year is spent on aid to industry, but that about two-thirds of that goes to prop up the old-established industries, those which were once the basic industries, such as the British Steel Corporation, British Leyland, British Shipbuilders and so on. Of course, there is a great argument for supporting those industries. Nevertheless, a substantial sum of money is being used for that purpose. That is in stark contrast with Japan, where most Government aid to industry goes to the modern, developing industries and assistance is not given to industries which saw their heyday in the past. The Government therefore have a duty to see that more help goes to the sunrise industries, and I know that they now recognise this. Certainly, my hon. Friend the Minister for Industry and Information Technology has succeeded in directing more funds into the new industries.
In this context, will the Government also give more thought to the use and promotion of science parks? By having industries close to universities, this can help to bridge the gap between research and development and the market place, which is necessary if we are to achieve profits from new industries. I should be grateful to know the Government's thinking on that subject.
Secondly, we must develop the skills to run such new businesses. Robots may do the work, but we need skilled people to provide "food and water" to keep those robots happy in the industrial scene. Nobody would doubt that there are shortages of skills in certain areas. That is very much an area in which the Departments of Industry, Employment and Education and Science should liaise to ensure the right educational background to develop the necessary skills.
I too should like to make a constituency plea. Lincoln would like a centre for information technology. I hesitate to get in the way of my hon. Friend the Member for Fife, East so I will not ask for an immediate reply today as he has. However, Lincoln has advanced engineering. It has a modern Marconi factory. It is on the frontier of technology. I hope that the Government will consider favourably our plea for an information technology centre.

Mr. Henderson: Is not one of the most exciting aspects of such developments the way in which the most important advances are taking place in various parts of the periphery of Britain? That can be further advanced by the use of information technology.

Mr. Carlisle: My hon. Friend has a good point. We must not see the problem in the isolation of our small constituencies. We want vigorous development throughout the whole of Britain. Scotland is a marvellous example of new industries going to an area which for some years has been industrially suppressed.
Thirdly, we must have a successful and progressive management combined with a co-operative, sensible and constructive work force. That does not necessarily concern the Government. The hon. Member for Islington, Central stated the importance of that. A concrete example of what can be done is provided by an advanced engineering factory in Lincoln, Smith Clayton Forge, a subsidiary of GKN. It has invested £10 million in a brand new forge, which is, without doubt, one of the best in the world. It has a tremendous potential for earning export orders and for providing high quality products on time anywhere in the world. That investment went ahead because management and unions worked closely together, even before the building was begun, to see how it would work in practice. The whole business deserves great praise for that. For example, it was agreed that there should be no restrictive practices in the running of the forge. Therefore, it will be an efficient forge from the word "Go". Each shift is a team, and the members of that team are capable of doing nearly all the jobs in the forge. They move around from job to job so that they do not spend all day at one job. The forge is worked with the greatest efficiency and flexibility and everyone appears to be interested and involved in the work.
That approach enabled the forge to be built. Without such an approach it would not have been built at a time of recession when orders were scarce. When it gets under way it will provide competitive goods on time anywhere in the world. By investing in advanced technology the forge has not created jobs, but it has defended the jobs already there for coming decades. It will ensure that the business will continue in Lincoln, providing opportunities and jobs and helping the community.
This is a clear example of the most important aspect of coping with the new technology. We must have good management and good employee involvement especially as the new technology inevitably breeds fears. Without that, none of the other requirements can possibly work. Therefore, I was glad to be a sponsor of a Bill introduced by my hon. Friend the Member for Kidderminster (Mr. Bulmer) which provides that all businesses should say in their annual reports what has been done over the past year to help to involve employees. I hope that the Government will give their support to that Bill when it comes before the House.
To sum up, the Government need to support sunrise industries and to put money behind them. Secondly, we need the skills that will make those new investments and businesses work properly. Thirdly, above all, we need good management, constructive employees and involvement at all levels. Given that approach, I am confident that technology can be harnessed for the promotion of employment and prosperity. As a nation we have a natural resourcefulness and ability, and there is no reason why we should not succeed.

Mr. Tam Dalyell: I believe that this is the first time that the Under-Secretary of State for Industry has sat on the Front Bench and I should like to congratulate

him on his new post. At least he has been asking questions about this subject from the Back Benches. As we know very well, Back Benchers who ask recondite and learned questions often do not land the jobs. However, the Minister seems to be an exception and I am sure that he deserves the job.
I take the opportunity to ask the hon. Gentleman some recondite questions. If he does not have all the answers now, I hope that he will write to me. First, what will happen about the Sherfield Committee on Science and Technology? If my memory serves me correctly, there was an undertaking during the Consolidated Fund debate, in answer to the hon. Member for Havant and Waterloo (Mr. Lloyd), that the Government would make recommendations in answer to the detailed recommendations of the Sherfield committee, in which Lord Todd and others played a prominent part.
I can understand that the minds of senior Ministers have been on the South Atlantic rather than the more arcane matters of science policy. Nevertheless, what is the Government's thinking, and will there be a response before the end of July to the report, on which the Lords involved spent a great deal of time and work? I attended many of the sittings, and they really did work at it. It would be a bit of an insult to them if they were not to get a response, although the Government may not agree to all the recommendations that were put forward. Therefore, my first question is, what will happen about the Sherfield committee report?
Secondly, I should like to raise the issue of biotechnology, and more specifically, the question—it is a minefield—of patent law. I will not go over the whole saga of Cesar Millstein, his work in Cambridge and the fact that it was not patented. Much of the commercial benefit that will undoubtedly come from monoclonal antibodies will be developed in Japan, France and particularly the United States. I should like to express the somewhat lay opinion that it is difficult to patent a living organism. One begins to wonder whether patent law, which could have served Britain and other European nations well in the last century, is relevant in biotechnology. It is a fast-moving field.
It is difficult to carry out any kind of sensible patent law in front of lawyers—whatever their other merits—who are not competent because of their lack of training in this field. I speak as the son-in-law of an appeal court judge and I do not run down lawyers, but the truth of the matter is that few people sitting on the Bench can give an informed assessment in patent cases concerning micro-organisms. My hon. Friend the Member for Norwich, South (Mr. Garrett), who is on the Opposition Front Bench, will recollect that he and I, about three weeks ago, went to the excellent John Innes plant breeding research centre in his constituency. It was an extremely interesting visit. Professor Hopgood, Professor Woolhouse and others there made the very same point and confirmed that there is a problem.
What is to be done about the whole issue of patent law? Has the time come when we can say to the Patent Office and others that patent law in this field is no longer relevant? It would, of course, have to be a matter of international agreement, and I do not pretend that it would be easy, but certainly the question should be asked.
I want to put a further question about biotechnology. It concerns the use of certain national assets in Britain. I do not know whether the Minister has had a chance yet to


go to Imperial College, particularly to the department of biochemistry there, and to visit Brian Hartley and see the enormous machine that was put there by the late Sir Ernest Chain, the greatest man ever in getting industrial funds in this field. Nevertheless, the upkeep of that vast biotechnology unit means that there is a great deal less money—at least in the department's imagination and probably in reality—for other professors at Imperial College in their departments. The important question, which can be repeated in other areas, is whether very expensive items, which for reasons of history have been placed in certain universities should be funded as if they were the national assets that indeed they are.
Before I leave the subject of biotechnology, I want to refer briefly to the development of certain medicines, and in particular to the very great problems confronting those of us who are interested in kidney failure and renal dialysis. Not only from the work of Mrs. Elizabeth Ward and others of the kidney patients but from the work of the Royal College of Surgeons, it is clear that doctors are having to make the most appalling choices as to who goes on the machine and who does not. The cost of a machine is about £14,000 a year. Those dreadful decisions as to who is to die and who is not have to be made because of the shortage of funds.
Greater effort in finding drugs and techniques to make dialysis, or its equivalent, a bit cheaper, is an absolute priority. On seven occasions I have tried to bring in a Bill which would enable hospitals to take the organs of anyone who has not contracted out during his or her lifetime, so I speak with a certain feeling on the subject. The question today is not the reform of the Human Tissue Act 1961 but what priority is being given to the various medical and scientific developments which could at least alleviate the problems involved in kidney failure.
The Association of Scientific, Technical and Managerial Staffs and others of us are concerned about the future of the Genetic Manipulatory Advisory Group—GMAG.I hope it is not true that anyone is thinking of running down GMAG, because it has most important functions—indeed, additional functions—to carry out in health and safety. If biotechniques are to be developed, the public should not be deprived of certain safeguards.
I am very much against the scaremongering in relation to biotechnology, genetic manipulation and genetic engineering. There is a great deal of scaremongering and many inaccurate horror stories have been produced in the last few months about the dangers of genetic engineering. Genetic engineering could bring about a great deal of good for mankind, but proper consideration will have to be given to safety. I am not sure that Bill Simpson and the Health and Safety Executive are the right people to do it. The role of GMAG in this respect, with Professor Williamson and others, is very important, and I hope that no one will undervalue the importance of GMAG. Some of us will be taking part in a delegation next Thursday to the Ministers concerned with the question.
I come back to a subject that was raised by the hon. Member for Fife, East (Mr. Henderson), and we are grateful to him for raising it. I speak on a constituency basis. Livingston has the good fortune to have Nippon Electric coming to it, with its formidable reputation, not least in management techniques, but a number of my

constituents wonder whether vast amounts of Government money should go to one of the most prosperous firms on the face of the planet.
Incoming firms, especially those coming to central Scotland—and perhaps to areas such as Lincoln and Norwich, which are developing advanced technologies—are unfairly advantaged in relation to firms which have gone through the heat and sweat of the day and might expand if they had the same advantages as incoming firms. I mention that problem partly in the context of concern about the Scottish Reactor Group and why it seems to have to run down.
The question of postgraduate and post-doctoral training is urgent. The age profile in many science departments is downright unsatisfactory. There are distinguished departments of physics which have not been able to appoint new posts or to bring in new blood since the early 1970s. The department of physics at Hull university does distinguished work on laser technology and the identification of malignancy in cervical cancers. It has not been able to appoint a new member of staff since 1969. Any Minister answering a debate such as this ought to be able to give some hope that one leg of the stool that we call the dual support system—university academic science departments—will not have to suffer a hardening of the arteries. Some kind of healthy age profile of departments must be maintained.
I take the opportunity, on a constituency basis, of referring to a training establishment that I believe to be profoundly valuable not only to Scotland but to the north of England. This concerns the proposed closure of Motec at Livingston. Motec is the industrial training centre for the road transport industry training board. The idea is that, because of cuts in the RTIB, there will be only one centre left—that at High Ercell, in Shropshire, on the Welsh border. There is a possible closure of £2 million worth of buildings and £4 million worth of equipment purpose-built. Enormously valuable work is done there for apprentices. The centre provides the kind of training that small garages cannot possibly give. It has a wonderful record of success in the external City and Guilds examinations. It is mad for a technical society to think of closing down a place such as Motec.
I have been to see the Minister responsible, the Under-Secretary of State for Employment. I have raised the question with the Department of Transport. I have even—most unusually—raised it with the Prime Minister in some detail. The RTIB will be having meetings at the end of the month. Will the Minister, in the full flush of his enthusiasm, please give his attention to the question of Motec at Livingston? I am not asking for an answer today but I ask him to involve his Department.
Finally, I want to refer to a question which must concern us all. It is a very narrow aspect of the Falklands issue. What will happen to advanced British industry if what started as farce, became an episode, and is now developing into a major calamity, is allowed to go any further? Part of the calamity is the effect on our advanced industries, not least the arms industry, of the loss of South American trade. It could be said that all the other advanced countries are co-operating in imposing sanctions. I wonder. Siemens has told the German Government that it has no intention whatever of breaking its trading links with Argentina. If anyone thinks that the advanced engineering


and chemical firms in Italy will impose any kind of boycott or trade embargo, he should think again. I simply do not believe it.
Furthermore, the evidence of the problem of the technological industry in Britain being disadvantaged comes from people who are no particular friends of the Labour Party. I shall start with Baring Brothers, the bankers. That bank is extremely worried that the links that it has built with South America, financing technically-advanced products, could be jeopardised, not only in Argentina but throughout the Latin American continent. If this folly goes any further, and if anyone were to put a missile or a bomb on the Latin American continent, let there be no misunderstanding that the effects will ripple round the whole Hispanic world. The Colombian ambassador told some of us that if that were to happen, Colombia, in his opinion, would break off diplomatic relations. The Venezuelan president made it clear to our ambassador in Caracas that if——

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I hope that the hon. Gentleman is not going further into a debate which we had last Thursday and which no doubt will take place again. Today we are debating technological matters, and the hon. Gentleman was in order when he was discussing that subject.

Mr. Dalyell: In that case, I shall go back to the subject, to the Bank of London and South America. It is financing, as it has done for many years, advanced technological trading with South America. I speak as one who had the good fortune to lead the IPU delegation to Brazil in 1975. We went to the Embraer aircraft factory at Sao Paulo and also to the space centre outside Sao Paulo. Some people have the impression that South America is not a very advanced place. In Argentina, 37 per cent. of the gross national product goes on industry, which is exactly the same percentage as in the Federal Republic of Germany. In many ways we are dealing with relatively advanced technological societies and trading with them on that basis.
That is why I am concerned lest, as a result of the Falklands issue, into which I shall not stray, the technological links that have been built up and financed, and which flourish and give employment to people should be jeopardised, not only with Argentina but with the whole of Latin America. It would be an abuse if I were to pursue the matter further, but I cannot emphasise strongly enough that, if this tragedy were to escalate, the effect on the technological and industrial wealth of Britain would be enormous, and would represent both an existing and a potential loss. The irony is that the trade links with Latin America at a technological level were looking very rosy, and were expanding.

Mr. Fred Silvester: I defy anyone to think of a subject that might come before the House on which the hon. Member for West Lothian (Mr. Dalyell) could not raise the issue of the Falkland Islands. I shall not pursue the matter, but I congratulate my hon. Friend the Member for Fife, East (Mr. Henderson) on raising this debate. It is one of those matters that are either shoved into the quiet time, as is happening now, in terms

of numbers of hon. Members present, or are debated late at night, but it is one of the most crucial matters affecting the country.
The effects of the technological changes which the country and the world now face will continue, whatever the Government do. Clearly, they are unstoppable. The advertisement of one of the unions—I forget which—contains the phrase
Ignore the chip and your job will go away".
This kind of attitude that is displayed when discussing the subject ignores the fact that there is a momentum here with which we have to live. The question that we must ask ourselves is: how do we deal with it?—not whether it will deal with us.
There are some long-term trends which we should remember. There is a danger in dealing with the subject, because it is currently fashionable. We can all get away with the odd quick references in speeches to technological changes, how we can hope to get jobs from the computer industry, and so on, but we have to adjust to the long-term trends.
Let us consider employment. In this century, the number of people in jobs has continually grown. There has been an even larger growth in the number of people seeking jobs. A study done by the Cambridge economic policy review showed that in the 20 years or so before 1977, about half the increase in the labour force was absorbed in new jobs and about half found its way into the unemployment list, whether registered or unregistered. Long before we started talking about information technology we were beginning to see the effects of substantial changes in the employment pattern, in the continuing increase in the number of people coming on the market. One example is married women. Over 50 per cent. of married women are now in work. We must add to that the number of people coming onto the market—people leaving school, and so on. In the next five years we shall have to find jobs for another 1 million people seeking jobs, while in the past few years about 2 million jobs have been lost.
It is therefore not surprising that there is much depression about the introduction of new technology. It is particularly valuable that my hon. Friend has chosen this subject for debate, because it gives us the opportunity to consider the main burden of his speech and that of the hon. Member for Islington, Central (Mr. Grant), which is that we tend to talk about technologies in a negative way, as the union advertisement demonstrated. The new technologies, like the old ones, have produced, are producing and will continue to produce many new jobs. They will adapt things with which we have become familiar, such as computerised washing machines. They will produce scope for things that we have not had before, for example, holidays on the moon. In the process they will enable us to give ourselves more leisure and thus switch to new jobs, for instance, in the service industries. All that will be going on at the same time.
The paradox is that the people who gain are not the same as those who lose. My hon. Friend the Member for Fife, East cited a study that showed—as I fully accept—that a company that adopts the new techniques gains a competitive advantage. Its market share increases, its workers' jobs are safer, their incomes probably rise and their hours of work may fall. Such things happen, but those who are not in that company and who are perhaps on the unemployment register, suffer. The paradox is that


although we cannot save our jobs unless we adopt the new technologies—because we shall cease to be competitive—a person cannot necessarily save his job if he does adopt the new technology. That psychological problem is important. It is one of the few areas in which the Government can have an effect. As my hon. Friend the Member for Lincoln (Mr. Carlisle) said, the Government can have some immediate and practical effect, because they are heavy purchasers of technology and can pump money into technology instead of holding up the declining industries. As he rightly said, it is extremely encouraging that my hon. Friend the Minister for Industry and Information Technology has been switching Government aid from the older to the newer industries.
The Government can do that type of thing. Indeed, only the Government can take a hand in some other matters. Many of the developments that will and should happen are dependent upon hundreds of different decisions by hundreds of different firms. Those decisions are essentially scattered. However, it is the Government who will have to pick up the tab for the social implications.
I have always regarded new technology as an opportunity. It is ridiculous that we should praise ourselves for the amount of work that we do. We spend more hours at work than almost any other country, except Japan. We expect someone to leave school at 16 and to work until he is 65. Therefore, he is at work for about 50 years. The average expectation of life is 72, so that person may retire for seven years. He will work for 50 years, live for seven and die. We do not wish to encourage that balance of life. Therefore, when we discuss increasing retirement prospects and shortening working hours we should not do so as if such ideals should be hidden away as undesirable. They are not. We should be proud of such ideals and work for them.
The National Institute of Economic and Social Research has made an effort to work out what has been done with the increased productivity since the war. It estimates that about two-thirds has gone into increased output and about one-third into shorter working time, greater leisure and so on. In other words, about one-third has gone into improved working conditions. If we steered Government policy towards that area we would have a major selling point, particularly for those who are most likely to be affected.
I wish to draw attention to two factors: first, retirement, and, secondly, the geographical spread of jobs. I am convinced that, like it or not, the country will stagger towards a reduced retirement age. We should be greatly helped if we decided that that was what we wanted to do and if we worked towards that in stages, announced in advance with the maximum co-operation. I understand that at current rates it would cost about £1,800 million a year to reduce the State retirement age for males. Obviously we could not do that at once, but we could work towards it.
We are a long way from solving the problem of the transferability of pensions. An enormous injustice is done to those who are declared redundant for one reason or another and who then have their pensions frozen or transferred, losing greatly in the process. If people are expected to change their jobs more than once in their lifetimes, we must face the implications both for their families and for them. Private companies cannot do much to help. However, Governments can and should start to

rethink how best the new technologies can be used to reduce the retirement age and make it easier to retire earlier.
Over the years regional policy has been coloured by a good deal of humbug. We pump money round the country, but the fact remains—and will remain—that the greatest single factor affecting the distribution of jobs is the continuing attraction of London as a capital in more than one sphere. That has been illustrated in many ways. 'The case that sticks in my mind is that the Location of Offices Bureau found that 90 per cent. of all relocations occurred within 80 miles of London. That was as far as the companies would go.
That situation cannot be changed overnight. However, one interesting aspect of the new technology is that people can now conduct similar businesses without physically transporting themselves into the same centre. When the Government and large companies introduce such new technologies, they should ensure that there are centres in different parts of the country. I do not think of the jobs sent to Newcastle where all the clerical jobs will shortly be computerised out of existence, but of the jobs—whether or not managerial—that will remain. If we set ourselves the task now, the new technology can help us in that way.
I shall not elaborate my argument now. However, I reiterate the essential point that I have highlighted by my examples. It is useless to pontificate about the advantages of the new technology to those who will lose their jobs and who see no chance of finding another one. That would he to whistle in the wind, which will do enormous damage to the introduction of new technologies and to the advantages that the country can reap. It is essential to consider the psychology involved and to find ways in which the Government—in encouraging the introduction of such new technologies—can explain how the people can benefit.
I shall cite one sad example. The Times undertook a survey of unemployed people below the age of 24. They gave the introduction of new technology as the fourth most important reason for the misery of their lives. The survey covered why those young people thought that they had no prospects of getting a job and why they were unemployed. If the young have got that into their heads now, the prospect of introducing such new technological changes will be endangered.
The Government can undertake the function of explaining how people can benefit. I hope that they will now begin to think about the advantages that can accrue and begin to sell those advantages to the firms that adopt them, forgetting the side effects.

Mr. John Garrett: The Labour Party welcomes this debate and congratulates the hon. Member for Fife, East (Mr. Henderson) on raising the matter. It is a crucial issue of national policy. We welcome the new Minister to what we believe to be an important job.
We approve of the motion. It would be hard not to. There is clearly a need for improved job prospects through the rapid development and use of advanced technology, for British businesses to grasp those opportunities with greater urgency and for the Government to pursue policies to "remove obstacles to growth" and stimulate the development of new techniques and products. Much depends on how one defines Government action to remove


obstacles to growth. The Labour Party has made the point many times that a main obstacle to growth in the use of new technology is the lack of growth in the economy. If the Government take the reduction in inflation as their main objective and use monetarist policies to achieve it, which means restricting credit and cutting public expenditure, growth is bound to come to a full stop. The index of industrial production, which stood at 104·6 in 1979, fell to 88·9 in 1981. It is very difficult to spend money on new technologies and invest in a declining market, as the hon. Member for Fife, East said.
When the CBI recently considered the restraints on growth and technological advance, it picked out the recession in trade, which is worse in Britain than in any other country in Western Europe—a home-made recession added to the world recession—the high exchange rate of the pound, the inadequacies of Government assistance and difficulties in raising development capital, most or all of which the Government could do something about.
The motion emphasises job prospects. We agree with that, but it is clear that the sort of new technology that we must foster in Britain must have a high job creation content and a low import content. For that we need a positive plan by the Government because, whether or not they depend on private enterprise to create the technology, the Government must cope with the unemployment and the changing patterns of employment that result from the introduction of new technology. The Government appear to us to have no discernible overall strategy for advanced technology, nor have they given much thought to the effects on employment. The hon. Member for Islington, Central (Mr. Grant) and the hon. Member for Manchester, Withington (Mr. Silvester) said that we can go on spending on new technologies or removing obstacles to their growth, but we must cope with the human effect of the massive unemployment that is likely to happen in our old-established industries, in office employment for the first time, and right across the scope of employment. We do not see the Government preparing in any way to cope with those changes.
The Government are spending much public money on information technology and we welcome that. On the other hand, as The Economist said on 27 February
The university cuts are mortgaging Britain's technological future.
In addition, it is now clear that the Government are reducing their successful programme of research into wave energy and cutting support for wind, solar and geothermal energies. Biogen, the American world leader in biotechnology, said recently that it would not locate a laboratory in Britain because of cuts in university spending. In robotics, Government funding is so low that we are lagging far behind our competitors in practical applications. In manufacturing technologies, the abolition of the research levies for the furniture and wool textile industries means that centres of innovation are being run down. We should sometimes stop to think not about Concorde or atomic energy programmes—high-spending, massive prestige projects—but about improving our manufacturing processes in such long-established industries as furniture and wool textiles. However, we are running down the research levies and thereby reducing our competitiveness.
In some areas in which we excel—for example, fibre optics for telecommunications transmissions—we are likely to lose our lead because of the Government's dislike of public enterprise and their refusal to accept the role of British Telecom in providing the infrastructure for the new sunrise industries based on microelectronics. Where we should have a strategy, we have a series of ad hoc decisions and a snowstorm of press releases from the Department of Industry.
We have known for many years that our national research and development effort is eccentrically distributed. The House will recall the work of Sir Ieuan Maddock, who used to be the chief scientist at the Department of Industry, showing that a remarkable proportion of our national research and development went to nuclear power generation and civil aviation, from which there was a very low return in exports. He used to compare the distribution of our research and development effort with that of Germany, which is heavily oriented towards the machinery industries, or with Japan, where it is heavily swung towards vehicles and electronics. We were spending much of our national research and development on product areas for which world exports were relatively low. Yet the Germans and the Japanese were backing up their export efforts with direct investment in research and development in high growth areas.
There is no real evidence that that has changed. Today we still need to match our research and development to potential world demand. One of the best examples is the research and development into alternative energy resources. We lead the world in research into wave power, yet the programme seems to have been cut by 30 per cent. At energy questions today it was not clear what had happened to that research programme, but it appears from all the external evidence that we can gather that it is being cut by about 30 per cent. That was made clear at a recent meeting of the Advisory Council on Research and Development, when it became known that the wave energy programme manager had retired prematurely, apparently because he was fed up with the way in which the Government were handling the work.
Wind energy work will be confined to just two sites in Wales and the Orkneys, with no new work started. Consideration is to be given to closing down the geothermal work presently carried out in Cornwall, and there is to be no further work on solar energy. Perhaps the Minister will tell us about the status of those programmes. Is it true that they are being run down to the degree that I suspect? The new energy process, especially wave energy, could provide tens of thousands of jobs in the equipment-supplying industries, for which a world market is rapidly growing. Yet we appear to be throwing away our lead, and not for the first time.
One problem in producing a development strategy is the constant discontinuity between the activities or policies of the Department of Industry and those of the Department of Education and Science. We try continually to bring that out in questions, in comments on ministerial statements and in such debates as this. The Economist said
Britain's high technology industries risk being left in the cold for lack of qualified manpower†Altogether, some 47,000 student places are being chopped from higher education in a country that already trails behind most of its industrial competitors in the proportion of youngsters it educates beyond age 18; that lags in the share of its workforce doing R and D; that suffers a shortage of the high-technology skills so essential in the sunrise industries.


According to Mrs. Thatcher, the annual cost of a student averages £5,700, while an unemployed person of student age (living at home) costs the public purse only £1,100 in benefits. Dubious sums, and not only because the marginal cost of extra students can be much less than the average cost. This is a big reason for the Government to turn a hearing ear to any university or polytechnic with proposals for training extra students cheaply. It is true that Britain lags even more appallingly in the number of apprenticeships it offers, but it is now managing both to cut and expand its training in all the wrong places at once.
We have had the example of Salford university and I am glad that my right hon. Friend the Member for Salford, West (Mr. Orme) has joined me on the Front Bench. Salford university specialises in technology. The University Grants Committee proposes to cut 40 per cent. of the grant and 30 per cent. of the students from an institution that the managing director of GEC-Marconi Electronics Ltd. described as second to none in its contribution to industry in its region. It produces 2,000 electronics engineering graduates a year. The United States of America produces 14,000 and, under present plans, its output of electronics graduates is about to decline.
I used to quote the example—I do not know whether it is still true—that Britain produces more graduates in Welsh than in production engineering, which gives us some idea of the priorities of our education establishment. NEDO has referred to a massive shortage of skilled people—around 20,000 in computer skills—yet the MSC under its new expansionary programme plans to produce only 5,000 skilled computer people a year.
One shortage that has been drawn to my attention, which is of great consequence to the schools computer programme, is the lack of lecturers in computing at teacher training colleges. As I understand it, London university's institute of education has no permanent post in this field. Who, then, will train the teachers to show the pupils how to use the small computers that have been dropped on schools all over the country?
Another example of shortages of newly skilled people is that in 1981 we trained 10,300 engineering apprentices, the lowest figures since records began and one which compares with 25,000 a year in the 1970s. Thus the output of apprentice engineers has halved. Sixty per cent. of German workers have skilled training and qualifications under a formal training scheme whereas in Britain today the figure is less than 25 per cent. There is no plan to coordinate the efforts of the Department of Industry, the Department of Education and Science and the Department of Employment in producing technologists.
I know that there is a great deal of friction between the Department of Industry and the Department of Education and Science on this issue. The Department of Education and Science is cutting back on the sources and provision of the skilled technologists of the kind we need for the Department of Industry's information technology programmes to proceed. Already there are bottlenecks.
To its credit, the electronics Neddy has produced a strategy for growth that is certainly needed. A trade surplus in electronics in 1975 of £100 million became a deficit of £300 million in 1980 and more than that in 1981, with the bulk of the deficit in information technology. This strategy, produced by the Neddy with the agreement of all sides within the industry, called for selective assistance from the Government, and a more effective public purchasing policy. It asked that the Government should require multinational companies to produce more

information on their activities, including transfer pricing and encourage them to use British suppliers. It also said that the Government should be more willing to support individual projects.
Perhaps the Minister will give his reaction to this important initiative which was set out in the NEDO document "Policy for the UK Electronics Industry". I understand that the Minister's boss in the Cabinet was not impressed by it. We wish to know why. Reports from the Advisory Council for Applied Research and Development make much the same point. It accepts the central role for the Government in the promotion of new technology, but refers to our national effort as chaotic. The NEDC report on industrial policies in Europe, of October 1981, addressed itself to a comparative study of Government policy towards the new technologies. It examined Britain, France, Germany and Italy and other Western European countries. The report made the following observation:
Fibre optics, viewdata terminals, semi-customised integrated circuits, telecommunications networking transmission equipment and radio communications are all areas where the United Kingdom has a good basis for commercial success which may well slip away without positive policy support.
The report repeated criticisms of our national education and training which have been made for a long time:
For over a century our educational system has, in comparison with other countries, been strongly biased against applied scientific and technical training.
The report spoke of our record on innovation:
The United Kingdom seems less able to bring about profitable commercialisation of new ideas.
The report even repeated what Lyon Playfair was saying in the 1860s but it repeated precisely what Neddy itself had said a couple of years before in "Industrial Performance" of January 1980:
Nevertheless, for the most part, the rate of take-up of the new technologies compares unfavourably not only with the USA and Japan, who are in the vanguard of these developments, but with other industrialised countries, such as France, Germany and Sweden and also with newly industrialising countries.
The main problem in this area today is work on the so-called fifth generation of computers, the expert, knowledge-based systems in which we are as far advanced in Britain at Manchester university, Edinburgh university and Imperial College as anywhere in the world. The Japanese have shown much interest in the work of these three great centres of excellence and the Japanese consider them to be in the forefront of development. The Times said recently:
It is not clear if any Government agency has serious plans for harnessing their talents.
The Government have mounted a study, which will lead to a further study in the summer, of our place in the fifth generation of computing. The Japanese are already setting up an institute for the fifth generation. When will we have a decision from the Government on how they see fifth generation computing and its place in national policy?
Britain's Government funding for the computer industry is half that of France, one-quarter that of Germany and one-sixth that of Japan. The French Minister of research and technology announced this month that information technology will be given strategic priority in French industrial policy with a virtual doubling of research funding and the creation of 200,000 jobs.
Our investment in telecommunications last year was £18 per head of population, compared with £30 per head in West Germany, £36 in the United States and £52 in France. Yet expenditure on our new wide band telecommunications network, about which the hon.


Member for Fife, East spoke, would enable us to determine the technical specifications for ancillary and terminal equipment. Imports of peripheral equipment, printers and terminals, rose from 60 per cent. of our home market to 66 per cent. in one year—last year. Foreign imports of computers are now running at 80 per cent. of domestic demand. With ICL, Sinclair and Acorn we have the capacity to innovate, yet our home market is being cut away from beneath us.
Ministers blame the private sector for not responding to technology. The Minister for Industry and Information Technology issues awful warnings. He says "automate or liquidate." I thought that that was a detergent slogan at first. Industry says that the Government are not setting a proper lead. They do not know where they are going. We want priorities and plans from the Government for information technology, robotics, biotechnology, telecommunications and new energy sources. We want all such strategies to be aimed at creating jobs, supported by a coherent strategy for education and training.
I was appalled at a lunch last week when executives of a leading information technology company talked of their despair over their dealings with Department of Industry officials. The officials were generalist administrators, changing jobs every two years, as usual. They were totally unfamiliar with the technology. I felt as though I was back in 1966, when I conducted studies for the Fulton committee on the Civil Service. I found precisely the same Oxbridge classicists were running Government Departments in what were supposed to be technical areas, changing jobs at two-and-a-half year intervals, and were endowed with the extra special skill of being a generalist—that means knowing nothing about the technicalities of the subject. There is a tradition of the expert on tap but never on top. Major public policy decisions are being made by the mandarin——

Mr. John Golding: Does my hon. Friend accept that some of us at that lunch thought the attacks on officials were unfair and that they were made out of self-interest on behalf of an American company? Those of us who deal professionally with some of the Department of Industry officials think that they act in the public interest.

Mr. Garrett: I am saying not that they do not act in the public interest, but that they are not experts. There is plenty of proof of that. One has only to note the intake every year of administration trainees into the Civil Service for top management jobs. They are more socially exclusive as to background, to university and arts degree subjects than they have been since the war. That is a well-known phenomenon. I do not understand why my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) should be so upset about it. I see no harm in an American company pointing out the weaknesses of a Department in relation to strategies for information technology. British companies have been saying the same for donkeys' years.
What is the Minister trying to do about the talent in his Department which is capable of giving the country a national strategy for new technology? Does the Minister believe that his Department has the capability to meet the demands of the motion? I have strong doubts. I doubt whether Government have the political will to go in for the

planning system, for strategy setting for the nation as a whole. I also doubt whether they have put their own house in order to ensure that we have the Civil Service that is capable of governing and managing the information technology revolution.
I am grateful to the hon. Member for Fife, East for raising this issue. He spoke mostly about information technology. Other hon. Members have spoken about biotechnology and new developments in medicine. The Minister should co-operate more closely and he must ensure that his Department co-operates more closely with the Department of Education and Science to provide the skilled manpower that we need out of our educational system, and with the Manpower Services Commission to ensure that we have the technological skills that we need.

Mr. John Watson: May I endorse the gratitude that has already been expressed to my hon. Friend the Member for Fife, East (Mr. Henderson) for his percipience in putting this subject before the House today? It gives us an opportunity to cast our thoughts upon it, and, more specifically, to review the assumption that has normally carried sway on both sides of the House for the past two or three years, that unemployment can be reduced if only we can get the economy moving again. The classic question seems to be: "Can economic recovery be effective in reducing unemployment?". Very few people tend to look further than that question. For a number of reasons that assumption has been highly questionable for the past two or three years.
First, this year, 900,000 people will reach school leaving age but only 600,000 people will reach the normal retirement age. Therefore, if we neither create nor remove any further jobs, unemployment is likely to increase by 300,000. Secondly, productivity in Britain is now increasing at a rapid rate—10 per cent. last year—and unless our productivity increase is at least matched by our production increase, the immediate effect will be an increase in unemployment rather than the reverse. Many manufacturing concerns in Britain are operating way below their level of capacity. The latest estimate from the CBI is that 15 per cent. spare capacity currently exists in British industry.
Thirdly, I turn to investment intentions. When I speak to companies in my constituency that are considering investment over the next six months it seems that, almost without exception, they are considering investment in new machinery that will produce more goods but will employ fewer people to do so. I am not speaking against productivity. All I am saying—this is in acknowledgement of what my hon. Friend has already said—is that productivity increases alone, unaccompanied by production increases, can lead only to an increase, temporary though it might be, in unemployment. Therefore, anyone who says that simple economic recovery will be instantly effective in causing unemployment to fall is expressing a simplistic thought.
A more sophisticated question, and one that has been addressed in this debate, is: "Can economic recovery, coupled with national initiatives on training and on technological investment, be effective in reducing unemployment?". On the face of it, they can be. That is a much more sophisticated and better question. Certainly, there is a need for training that has been dramatically demonstrated over the past 18 months. When 250,000 job


vacancies occur each month and when the Manpower Services Commission estimates that 40 per cent. of those on the unemployment register will have been out of work for 12 months, we have a fair indication that we are lacking in Britain the flexibility that we need in our skills and training in order to make the best of things. We need flexibility not only in skills and training but, as my hon. Friend the Member for Manchester, Withington (Mr. Silvester) mentioned, in the transferability of private pension schemes, in our housing system and so on.
There is clearly a need for much greater training than has been applied until now. But greater training alone, allied to an increase in economic activity cannot be effective in bringing down unemployment. Training people does not directly create jobs. It may make us more competitive as a nation and, indirectly, lead to the creation of new jobs, but it does not create new jobs itself. Therefore, we are still left with a need for jobs.
Although I agree with, and deeply respect my hon. Friend the Member for Fife, East, I had a similar thought to some of the sentiments that he expressed with regard to technological investments. The investment in higher technology that Britain now finds imperative cannot be justified on the ground that it will create jobs. It can best be justified on the ground that if we do not take it, we can expect a further loss of jobs. If we are to increase our investment in technology and have the technological drive that he so wisely advocates, one consequence must be that productivity in the United Kingdom will rise faster than would otherwise have been the case. Clearly, that will make us more competitive in the world, but I would emphasise that unless we are able to match in increased production the increases we are now achieving in increased productivity, the consequence can only be increased unemployment.
The reduction over five years of unemployment from 3 million to 2 million, bearing in mind the structural changes in the British working population, the need of women for jobs, the fact that there are more young people coming on to the labour market than there are old people leaving it, and the increased velocity at which we are achieving productivity gains, means that our production must increase by between 45 and 50 per cent. over the next five years.
If we are to produce that much extra we must ask ourselves the inevitable question: "Who will buy it?". Secondarily, of course, our domestic market will become the purchaser of that increased output but I do not believe that we can expect to get that increased production unless we anticipate at the same time a large increase in our share of world trade. If we anticipate a 45 or 50 per cent. increase in output, it is naive to do anything other than to base that on the assumption that we can increase our share of world trade by 45 or 50 per cent. as well.
This year our share of world trade was about £55 billion. It seems a tall order for a nation so heavily based on exports as Britain to increase that share by 50 per cent. in volume terms over the next five years. We already possess 6 per cent. of world trade. I agree that it is a completely laudable target to aim for 9 per cent. of world trade and I would not disagree that we should aim for that.
However, to base all our estimates and contingency plans for unemployment on the assumption that that target will be met could lead to a dangerous situation.
If economic recovery alone will not bring down unemployment, and if neither training nor technological

investment—necessary though they are—will bring down unemployment, we must examine some change in the structure of Britain's working population. That subject was touched upon briefly by my hon. Friend the Member for Withington and also the hon. Member for Islington, Central (Mr. Grant).
Three candidates for change immediately thrust themselves forward. It is suggested that we reduce the working week. It is also suggested that we postpone the age at which people enter the working population. It is further suggested that we should bring down the age at which people leave the working population through early retirement. I think that it would be unwise to believe that there are many fruits to be gathered down the lane of the shorter working week. I have yet to hear a convincing argument for the working week to be reduced from 45 hours to 35 hours without the amount of overtime being worked increasing or without hourly costs increasing for some other reason. If hourly costs are to increase, productivity can only come down and, with it, our competitive position in the world. For those reasons I am inclined to disregard those who suggest that the working week should be reduced.
What about postponement of the age at which people enter the working population? This is the basket that carries most of the Government's eggs at the moment. The new training initiative with £100,000 million behind it has a great deal to commend it. I know that it is intended as a training initiative and not fundamentally as a structural adjustment. However, its effect will be to postpone for one year the age at which people enter the real labour market. I do not think that we can postpone entry for two years. It was right to introduce a postponement of one year but it is an option that, once accepted, is automatically closed. Unemployment is not forecast to fall below 3 million in the next 12 months even though the new training initiative will be coming on stream. Therefore, a repeat of the exercise cannot be assumed to bring down unemployment much below 3 million.
I find myself echoing the thoughts so ably expressed by my hon. Friend the Member for Withington when he said that there is a great deal to be said for earlier retirement. If it is to creep upon us as an inevitability, as my hon. Friend said, let us adopt it as a policy beforehand.
I advocate two schemes to the Government. First, they should extend the job release scheme to enable those who wish to retire at an earlier age to do so completely and to enable those who are approaching retirement age to work fewer hours per week in return partly for a reduced rate of pension in the meantime and partly for a reduced wage. That would not prove particularly expensive to the Exchequer and it could prove highly effective in reducing the working population, providing extra jobs and giving some elderly workers the option that they have been seeking for a long time.
I know that my hon. Friend the Under-Secretary of State who is to reply to the debate is not specifically responsible for all employment and early retirement policies, but I know of the increasing influence that he exercises in Government circles and I ask him to prevail upon his colleagues in respect of my second specific suggestion.
In his Budget Statement my right hon. and learned Friend the Chancellor of the Exchequer announced a new scheme. He said that he was prepared to make available £150 million a year for any scheme that would take off the


unemployment register 100,000 who could be classified as the long-term unemployed. That scheme received neither the attention nor the praise which I believe it deserved. If, as it is customary to presume, it is to be established as a competitor to the community enterprise programme, it can be sure of a great deal of opposition, especially from some of the institutions involved. If, on the other hand, cash is to be given to the community enterprise programme itself, it will be neither particularly new as a scheme nor particularly cost-effective. Successful though the CEP has been, it has been a particularly expensive way of creating jobs.
There are 160,000 men on the unemployed register who are older than 55 and who have been unemployed for one year or more. I humbly suggest that if each one of those men were given the opportunity for retirement now on a full retirement pension, at least 100,000 would accept. I guess that the incremental cost to the Exchequer of accepting that suggestion would be less than £30 a week for each one. That is precisely the sum that my right hon. and learned Friend the Chancellor of the Exchequer made available in his Budget Statement. That will be the best instrument for taking 100,000 of the long-term unemployed—perhaps the most deserving people—off the unemployment register for the sum that my right hon. and learned Friend had in mind.
I do not believe that economic recovery alone can be effective in reducing unemployment. I endorse and acknowledge all that has been said about the need for training, investment and new technology. I think that at best those measures will prevent unemployment from increasing, but I do not think that we can regard them as candidates for bringing down unemployment. If we are to reduce it, we must consider some structural means of altering the working population, and by far the best candidate is some form of early retirement.

Mr. Bob Cryer: The hon. Member for Skipton (Mr. Watson) asked who would buy the extra production that is created in the manufacturing sector, and he supports a Government who are trying to impose wage curbs on relatively low-paid workers. He thereby denies ordinary people the opportunity to participate in creating the demand to take up the extra production.
The hon. Gentleman dismissed the idea of a shorter working week, which would benefit working men and women enormously and which many millions of them seek, because he argues that they will take it up in increased overtime working. Overtime decisions do not rest with the workers. In practice they are management decisions. Many of my constituents have written to tell me that they dare not challenge a management decision on overtime or on other issues—they dare not even join a trade union—because of the power that is exercised by management. Therefore, it is management which needs to consider the necessity of utilising overtime, not the workers, who frequently tell me that they wish to have a shorter working week. I believe that a shorter working week would provide more jobs and would be a sensible reaction to the problems of technology that beset those who work for a livelihood.
Workers have consistently and continuously accepted advanced technologies. Whenever we have a debate about

the railways, for example, the Tories attack railway workers for not accepting new developments. That is not true. They have accepted the electrification of the signalling system, signal box cutbacks, single manning of diesel and electric locomotives in many areas and the use of advanced technologies in the control of locomotives.
The hon. Member for Skipton knows that in the textile industry new techniques have been introduced. There are now 24-hour shifts and new and improved speeds of spinning and weaving. The result in all instances has been that workers have borne the brunt of attacks by the management and by the organised political party which represents it—the Conservative Party. It is no good Conservative Members talking about advanced technology without accepting the need to take fully into their confidence the workers who have to face the possibility of redundancy.
The hon. Member for Manchester, Withington (Mr. Silvester) said that workers are not prepared to take kindly to new technologies that will wipe out their jobs unless alternative jobs are available to them. That is right. The right way to introduce new technologies is to take workers into our confidence by sharing decision making and ensuring that there are alternative jobs to those that are diminished by the new technologies.
Alternative opportunities will develop, because of the production of new equipment to replace the old. However, it is not easy for a worker to accept nebulous notions when he is facing redundancy. Therefore, we must seek the co-operation of workers and let them know what is going on. How can that be done when tomorrow the Government, who utter platitudes about the need for new technologies and increased productivity, will ask their supporters to support the Bill that is designed to sustain the attack on the trade union movement by curbing the rights of ordinary working men and women to organise? The trade union movement will see that as another example of the Government, who represent capital, seeking to exploit working men and women. When workers want to organise, the self-same Government introduce legislation to curb their rights. Naturally, they are suspicious of any scheme that is introduced by the Government to bring in advanced technology that will benefit the capitalist system which they represent and not mankind. At the same time, the nation sees the removal of the training boards. If we are to have a continous development of new technologies—because many new techniques have already been instituted in industry and new ones are being applied continuously—we need more and better training. Yet the Government are cutting back the training boards and, as it were, selling them off to private enterprise. It was the Tory Party which introduced the boards as a telling pointer to the need for some sort of Government intervention in organised training in the 1960s. The Government's action simply does not make sense.
Higher education is being severely slashed, so that the opportunities for our young people are being cut back. Three of the universities that are being most seriously affected are the former colleges of advanced technology, Aston, Salford and Bradford. They share the common factors of being close to industry and being involved in the development of ideas, new products and new applications in industry by using and developing advanced techniques. They are all close to urban centres and closely integrated with the manufacturing industries. They are at the top of the list for savage cuts organised by the Government


through the "independent" UGC. It simply does not make sense, and it shows, as my hon. Friend the Member for Norwich, South (Mr. Garrett) said, that the Government do not have a policy for coping with the introduction of advanced technology. The Department of Industry may have some sympathy for it, but the Department of Education and Science chips away the opportunities for its use and application amongst, and the education of our young people.
The hon. Member for Fife, East (Mr. Henderson) moved the motion, with which, by and large, we agree, with the exception that job prospects might not necessarily be improved through the more rapid development and use of advanced technology. He pointed out that there is a lack of demand and a failure of private enterprise to create opportunities, which he claims are available. Because of the Government-created recession cutting back on demand, firms do not feel that there is the opportunity to innovate and invest in new techniques and ideas. The hon. Gentleman is quite right to make that point. It is a failure of private enterprise. He then suggested that we should rely on the multinationals, but they have not been of enormous help to this country. We should take a much closer look at the way in which they invest here, the use that they make of their investment and how it fits into a national plan for recovery.
We cannot expect that from the Government, because they simply do not have a national plan for recovery. They rub along in the hope that private enterprise will pick up the pieces, provided that they can attack the organised trade union movement sufficiently to make it supine and acquiescent.
Let us consider the matter that the hon. Member for Fife, East mentioned, the manufacture of television sets. People now regard textiles as an old-established and declining industry. Several years ago a multinational, Thorn EMI Ltd., introduced into Bradford the biggest television assembly factory in Europe. It was to take up the skills of the textile workers, with their dexterity, attention and capability to absorb details and close supervision to the assembly of highly complicated electronic components.
In 1977 Thorn EMI decided unilaterally, without any consultation, to close the factory and put 2,000 people on the dole. The Labour Government had no power—this applies to the Tory Government also—to stop that sort of decision. How can we possibly rely on the multinationals to create the investment opportunities and the jobs that the country so badly needs?
Thorn EMI, in spite of its adverse decision-making, which has created many redundancies, at least has a record of some research and development. But think of De Lorean. I do not need to go into that any further. I think that the notion that we should compete by offering ever-greater incentives to multinationals to invest in this country at any price is something that we should reexamine.
The hon. Member for Fife, East also mentioned the requirement for import controls. He said that our manufacturing industry in computer software and hardware faces the possibility of unfair competition. That is right. If we are to have any sort of sensible development of manufacturing industry we must have planned trade so that we can selectively control imports, to allow our

investment to prosper and grow. We have to look at the problem of retaliation and take that into account. It is not insuperable.
The planning of trade grows increasingly throughout the world. It makes energy-saving sense. There is little point in using expensive shipping to carry 50,000 Minis to West Germany so that we can import 50,000 Volkswagens of similar character and style. That does not make much sense. We have to be prepared to select, as we need, for the requirement of our manufacturing industry. If we do not, we shall find a continuing erosion and reduction in the level of skills in this country. That will mean a reduction in the opportunities for people to develop the manufacture and assembly of the increasingly complicated machinery that advanced technology uses. We shall lose on all fronts.
I want to say a little about the safeguards in the implementation of advanced technology, not just its manufacturing. The hon. Member for Fife, East talked about cables growing all over the nation like some gigantic octopus. He talked about public ownership of the cables and the desirability of having them under private enterprise. It is a bizarre notion that half a dozen private enterprise cable owners should tear up our streets one after another. They could not possibly do it in co-operation, because that would vitiate the notion of competition. It seems to make absolute sense to have the cables under complete public ownership.
We need safeguards for the new technologies for workers as workers, to make sure that alternative job opportunities are presented to them when new technology erodes jobs. We also need safeguards for workers as people. The new techniques of providing and storing information on computers and linking those computers to terminals where information can be obtained need safeguards. We cannot leave it to chance. There must be some supervision, and the Government's proposals are less than adequate.
I shall quote by way of explanation from Computing of Thursday 4 March 1982. It pointed out that an MI5 £20 million file has been set up in secret. That is a central Government file, but of course with the new technology the information will be multiplied in company files up and down the country. The article says:
A top secret computer system capable of carrying a detailed file on every adult in the country has been set up clandestinely by the MI5 security service … The computers—dual ICL 2980s—were ordered under the counter and paid for without informing Parliament.
That is standard procedure for this sort of thing.
This came at a time when the purchasing agent—the Ministry of Defence (MoD)—was being chastised by a Parliamentary committee for wasting millions of pounds on 2980s bought in the mid '70s.
Along with the dual processors, which were the biggest in the ICL range, MI5 also has at its disposal a massive 20,000 million bytes of online store in the form of 100 disk drives each with a capacity of 200 megabytes.
The article went on:
Further investigation suggests there are plans, which may already be implemented to some degree, to link MI5's computers to other central government computerised databanks, using national insurance numbers as personal identifiers.
That has the essence of truth about it, because answers to parliamentary questions that I have tabled make it clear that there are links between Government Departments and MI5. We need safeguards in that area of government. We also need safeguards about the storage of information used by organisations such as the Economic League, which


gives details to employers, who use them to blacklist workers. We have had too much research and development on defence and not enough on civilian purposes. Our computer spending is one-sixth of the spending of Japan, which leads the world in the products that people need and want. Japan spends less than 1 per cent. of its GNP on defence, whereas we spend about 5 per cent. of our GNP on defence. We need public ownership of the significant areas of manufacturing industry, so that we can put in the new techniques by, for and in conjunction with the workers. We must expand demand, which means injecting £6 billion to £10 billion into the economy to take up production. We also need early retirement, whatever the cost—it has been suggested that it would cost £1·8 billion. Millions of working men want early retirement and we ought to bring the retirement age for men into line with that for women. We should also move towards a shorter working week, which could be done in conjunction with the workers as part of a planned economy. We cannot expect those actions from the present Government but the next Labour Government will be committed to reduce the level of unemployment and introduce essential planning for the economy.

Mr. Andrew F. Bennett: I wish to make some constituency points about applied technology and Government help for it. I was probably elected to the House because of the failure of the Conservative Government between 1970 and 1974 to look after the interests of technology in my constituency.
At that time, the famous machine tool manufacturers, Cravens, were situated in my constituency. The firm had an international reputation and needed a relatively small sum from the Government or the banks for its next generation of machine tools. But the Government of the day said "No" and that fine manufacturing capacity disappeared from Stockport.
Many of the employees went to other firms in Stockport and they tell me that over the following eight years many of their new employers bought from Switzerland and other overseas countries machines that were almost identical to those that Cravens had been developing. That is a clear example of a Government failing to give a little assistance at the right time to a technical, innovating firm.
We have seen a similar process in the past few weeks. The Stone Platt group has done much innovation in the textile machinery industry. There are some world beaters in the company but the "listening bank"—the Midland—seemed to have not a single care for my constituents and others in Greater Manchester, Lancashire and elsewhere in the country who work for the group and would not put up the extra finance to keep the capacity available.
The receiver has had to sell the company and bring in overseas bidders. There have been guarantees that jobs will be kept here, but one suspects that the successful technology will be taken to other parts of the world for development. That is a lamentable picture. Neither the Government nor the bank would put up the money to retain that manufacturing capacity.
The Government have let down my constituents in many other ways. The Prime Minister told me in a written answer last week that in the past 12 months there was more

investment by British firms overseas than in Britain. That is appalling. Firms need the money in this country, but we allow it to go for investment overseas.
Let us consider the intermediate area status of Greater Manchester. The retention of that status would encourage local firms to continue innovating and developing in the area, but the Government have removed that status and inflicted a tragic blow on Manchester.
The development of Manchester airport would encourage innovators to come to the area, but it is extremely difficult to persuade the Government to recognise the importance of the airport. They seem happier to have developments at Stanstead. I understand that the cost of the public inquiry there equals the likely cost of a feasibility study on a rail link to Manchester airport.
One of the big attractions of the Greater Manchester area is the service that it receives from its educational institutions, including Manchester university, Salford university, UMIST, Manchester polytechnic and many further education colleges. They all have a high reputation for the services that they provide for industry. There are a number of arrangements for consultancy projects with industry, but many of my constituents who are involved in that work tell me that the fear of cuts in the universities results in more energy being devoted to job protection than to innovation.
Some of my constituents are even talking about setting up private consultancy firms. That sounds all right, but such people will be taken off the development stage and although they may find jobs for themselves they will not be continuing the co-ordination of innovation in the education institutions. That is what the Government ought to be stimulating, but they have instead introduced cuts which have given those institutions a psychological shock and have caused considerable damage.
We should be looking not so much to high-technology products as to using high technology to design fairly simple products, particularly for the Third world. Many of the problems of the Third world need sophisticated analysis, but only simple products.
I was a member of a delegation that visited Bangladesh and we noted that Britain and other countries offered as aid technology that was irrelevant to Bangladesh's problems. The country needed simple innovations, such as a process for drying rice on remote farms. We should use technological innovation to produce such processes.
We have managed to get computers into schools and in most schools one teacher has become enthusiastic as a result of reading computer magazines, rather than as a result of training, but the rest of the staff does not have a clue about computers. If computer education is to work we need to educate not one expert but all the teachers.
There is a problem of managerial attitudes in one area in my constituency. I came down from Manchester today on the train with one of my constituents who works for a firm that is a leader in its sphere. It imports a considerable quantity of components from Hong Kong. I discovered that the firm now imports components from Hong Kong, but not because they are cheaper. They can be produced in Britain just as cheaply. The problem is that there appears to be a vested interest among the buyers. It is attractive for them to go to Hong Kong occasionally to make the necessary purchases. That is human nature. If Members of Parliament were asked to go with a delegation to a distant corner of the world, there would be plenty of


volunteers. If, however, they were asked to go to a suburb of Greater Manchester, far fewer would be interested. That factor of human nature should be closely examined.
I stress that the Government are not grasping the need for technical innovation. They are not putting forward the necessary policies. There is an absence of a clear investment policy, which would help my constituency, and a clear commitment to education which would encourage the innovation of the processes involved.

Mr. Jim Craigen: The hon. Member for Fife, East (Mr. Henderson) has raised an important matter. Like my hon. Friend the Member for Norwich, South (Mr. Garrett) and the hon. Member for Manchester, Withington (Mr. Sylvester) I sound a cautionary note about the extent to which new technology will create the quantity of new jobs that the hon. Member for Fife, East envisaged. Because of the shortage of time I shall confine myself to one point.
It concerns a matter that is under the direct control of the Government—Civil Service employment. I recently asked both the Secretary of State for Employment and the Minister of State, Treasury, who has responsibility for the Civil Service what they thought would be the effect on Civil Service manpower of the introduction of office technology. Neither could give me a satisfactory answer. I was given the usual formula that the cost of producing an answer would be too great. Nevertheless, the fact remains that with the introduction of office technology, many office filing and other routine clerical jobs are like to disappear. That is quite apart from the Government's intention to reduce the size of the Civil Service by the next general election. There must be some calculation of the impact of office technology on labour-intensive departments in the Civil Service. It is unsatisfactory that the Government disclose so little information about their intentions about their manpower. Moreover, the introduction of office technology will render unskilled many existing skilled jobs in the Civil Service. Presumably, it will reduce the status of some jobs and, in the long term, the pay associated with them.
The hon. Member for Fife, East concerned himself primarily with the higher skills and qualifications that will be required at the other end of the scale. That is why it is rather short-sighted of the Government to continue to press ahead with reductions in the number of opportunities in universities. That is especially important to me as I represent a Glasgow constituency and both Glasgow and Strathclyde universities have fewer places to offer when the number of applicants has never been higher. That is equally true in the further education sector. Glasgow college of technology is unlikely to make up for the shortfall in places that should have been available in the university sector.
Although I agree with the thought behind the motion that businesses should grasp their opportunities, many businesses are simply clutching on to survival. When he replies, I hope that the Minister will say that Government economic and fiscal policies are being geared more directly to assisted businesses that are already in being to stay in existence rather than to start-up projects which all too often create many jobs in consultancy and paper work, but in the end do not justify their existence.

The Under-Secretary of State for Industry (Mr. John Butcher): I assure the hon. Member for Glasgow, Maryhill (Mr. Craigen) and the hon. Member for Stockport, North (Mr. Bennett) that the Under-Secretary of State for Industry, my hon. Friend the Member for Norfolk, South (Mr. MacGregor) will go to bed with Hansard tomorrow night and glean from it those matters that the Department of Industry and its liaison group with the Department of Education and Science should investigate at his behest. I assure the hon. Member for Maryhill that my hon. Friend will give the appropriate attention to the matters that he raised, especially with regard to the two universities.
I repeat the House's congratulations to my hon. Friend the Member for Fife, East (Mr. Henderson) on the skill with which he mounted the debate. Many of us agree that all too often the House spends its time thinking from week to week, sometimes literally thinking from Thursday to Thursday. It is a rare privilege for hon. Members to be able to sit down and think about the future. I shall return to that theme later.
It is vital that we occasionally stand back from micro-economic considerations, the ephemeral considerations, and start to think about the type of economy, society, services and politics that will exist for the rest of the century.
My hon. Friend the Member for Fife, East raised several questions. I shall deal with them in the order in which he delivered them to my in tray. First, the problem of the liberalisation of British Telecom is a central issue of this and, I suspect, other Parliaments. To what extent can we keep a balance between British Telecom's monopoly and the need to maintain a central service, and the requirement to ensure that BT is not a monolith, that it has some proper competition and that the competition is given a fair chance in the markets that BT still monopolises? I take my hon. Friend's point on balance.
With regard to standards, I am tempted to say that I am delighted to report, but after a few days in the job I am not so delighted to report, that I have responsibility for chat area of endeavour. There is a committee called Focus which is involved in the mammoth task of IT standards. My first act while chairing the committee was to draw a line and to delete 12 of its 15 objectives. Having examined the log jam we decided to take the first three logs in the pile in the hope that we could get something moving. I hope that my hon. Friend will agree that the priority should be in the following three areas: local area networks, open systems inter-connect, and teletext and viewdata. We have appointed project leaders for each of those three. I am the project leader for the third. We recognise the need to resolve the standards issue.
My hon. Friend also asked about value added network services. Since 1 April, those who wish to supply VANs may apply direct to the Department of Industry, irrespective of whether BT is offering a similar service. In other words, there will be genuine competition. BT is no longer judge and competitor.
With regard to cables, several hon. Members on both sides, including the hon. Member for Keighley (Mr. Cryer), have referred to public and private sector balance. I hope that there might be unanimity in the House along the lines of "Beware monopolies", be they public or private. I suspect that the hon. Member for Keighley was


about to go through a slightly Stalinist twitch when he mentioned the private sector digging up the pavement, while the benign public sector would supply its service in a benign, monopolistic way, to which matter I shall return.
My hon. Friend the Member for Fife, East also mentioned the need to ensure that there is reciprocity in our trading arrangements and particularly to try to achieve some form of equal treatment among the PTTs in the countries of Western Europe and the West generally. The key word here is "reciprocity". It is true that there are dirty tricks departments in the PTTs of a number of countries—I suppose that we all tend to go for the French, if not the Japanese, in that respect—but we are not completely virtuous ourselves. I shall not suggest areas in which we are less than virtuous. I assure my hon. Friend, however, that we are mindful of the British interest, albeit within the confines of GATT and EEC regulations. I suggest that he should occasionally read the code when he receives replies on that matter.
My hon. Friend asked about an information technology centre in Fife. Two of the 20 already approved will be in Scotland. We hope to include about 10 more in Scotland in the second wave and to cover the Fife area. Potential sponsors are already in touch with the MSC.
Lastly, my hon. Friend referred to the possibility of the continuation of the MAP project. I can report that £14 million out of the £55 million has already been committed and we expect the money to last until the end of 1982. The take-up has been very good and a recent survey by the Policy Studies Institute shows that the project has been well received and has been cost effective. Nevertheless—again, a number of hon. Members referred to this—only 30 per cent. of companies in the United Kingdom use or intend to use microchips, so I suspect that there -will be a continuing review, possibly resulting in additional resources in the coming year.
Many of us have sought parallels between what is happening today and what has happened in the past. I propose a quite simple parallel in considering our international and domestic position in relation to new technologies. In the nineteenth century, the British genius and talent was in importing low-value products, adding value to them and then re-exporting them. We had huge entrepot trading ports, many of which are now in the constituencies of Labour Members—for example, in Liverpool, Glasgow and inner London.
We seem to have lost the knack in the adding value and re-exporting trick. I suggest to the protectionists and to those with the "not manufactured here" problem, however, that there is nevertheless opportunity here because a silicon chip is a very cheap device. A 64K random access memory can be acquired for about $8. Around that, one can figure a microcomputer. If we imported that, too, it would cost about $2,000. By the time that microcomputer has been fitted with peripherals, the operating system has been written, the British bespoke software has been written and the engineering contracts have been signed with existing users, that $8 chip or the $2,000 import around it would probably earn £9,000 for the United Kingdom.
Therefore, let us not get too defensive about our current free trading policy. We can still make money in the way that we did in the past. If we capitalise on our continuing genius, particularly in software, there is no reason why we

should not get back to that tradition and earn a great deal of money in the process. Scottish engineers and Welsh mining engineers roamed the world in the nineteenth century. I hope that British information technology engineers and software designers will follow them in the late twentieth century. There is no reason why they should not do so.
I wonder how many hon. Members remember the example of Caxton. The hon. Member for Islington, Central (Mr. Grant) referred to someone—presumably my right hon. Friend the Secretary of State—as a Caxton House Galtieri. No two people could be more opposite than Caxton and Galtieri. The one is a thoroughly reactionary individual—I shall not follow the hon. Member for West Lothian (Mr. Dalyell) into the Falklands debate—whereas the other was a far-sighted, dare I say progressive, forward-thinking importer who had an open mind. The people who were most frightened of Caxton, of course, were the monks in the monasteries.

Mr. John Grant: In view of the Minister's remarks, I am happy to withdraw the Caxton House part of my assertion in respect of his right hon. Friend.

Mr. Butcher: The hon. Gentleman has done us all a favour, as I can now delete five minutes of my speech. I know that my hon. Friend the Member for Fife, East will demand in courtesy at least the last two minutes of the debate.
I was asked to give the Government's "Strategy". This is always a problem when we debate across the great divide. The hon. Member for Norwich, South (Mr. Garrett) and his hon. Friend the Member for Keighley started to give way, if I may say so, to their dirigiste tendencies. This is precisely the kind of area in which one cannot put forward a strategy. I take the analogy of a river. Members of Parliament sit here watching the river. We see the information and the developments flowing by. Occasionally, we may try to dam it. In looking at the myriad developments, the mass of information, new products and new tendencies, however, the most important factor is what is happening up in the foothills where the rain is falling. There are thousands of companies and thousands of individual cerebrums who represent the area up in the foothills, and no Government Department, including the Department of Industry, can read those tendencies in advance and say that this or that is the British Government's strategy and that this is our equivalent of the French approach or of MITI.

Mr. John Garrett: The Government have a strategy. It is to cut 47,000 students out of higher education. How is that a strategy for encouraging high technology? The strategy is to cut Salford university—a university devoted to the practical arts—by 40 per cent., and to cut Aston university. We know what the strategy is. I admit that those are decisions of other Departments, but the Minister cannot simply wave them aside and maintain that there is no point in having a strategy.
I also asked the Minister specifically about the truth or otherwise about the Government's research work on alternative sources of energy, particularly wave power, being radically reduced. That is another kind of strategy.

Mr. Butcher: The hon. Gentleman mentions two issues. The first is the responsibility of my right hon. Friend the Secretary of State for Education and Science.


I shall report the hon. Gentleman's observations to him and come back to the hon. Gentleman on this in due course.
On wave energy, the hon. Gentleman has touched a very sore point. At Lanchester polytechnic there is someone whom I regard as the leader in wave energy research, and I, like the hon. Gentleman, am discussing with the Department of Energy how we can pursue that further. Again, I give the commitment to come back to the hon. Gentleman on that.
I respond to the request for a strategy by suggesting that three areas of analysis must be our starting point for any strategy, whether with a capital "s" or a small "s". I think that the whole House will agree that the older industries will automate and will shed labour in order to survive. The British motor industry, for example, will have to achieve the manning levels of Japanese manufacturers. I do not underestimate or attempt to smooth over that problem. On the other hand, the new industries that we now call "sunrise industries" will come on to the market place and into our industrial scene. I refer here, for example, to the manufacture of computer peripherals and the use of fibre optic cabling, which is a massive innovative venture. Here I pay tribute to British Telecom and its research laboratories and I hope that a genuine partnership between the public and private sectors will take this forward into areas of job creation. In addition, we have a talent for adding value which I referred to earlier.
Old industries will retrench and new ones will come up. There will also be new services. Several hon. Members have gone into the issue of cable television and how that will affect British Telecom and its relationship with potential competitors. I suspect that the House will return to that again and again The issue is receiving considerable attention in my Department, particularly in the light of assertions made by the private sector suppliers who suspect—in some cases they may be correct—that the might of British Telecom is being used to exclude them from certain sections of the market place.
This debate is about hyper-efficiency and boosting the wealth creation process. I congratulate my hon. Friends the Members for Manchester, Withington (Mr. Silvester) and for Skipton (Mr. Watson). We must get the psychology of the debate right. That is a legitimate role for the House.
Those who create wealth and those who distribute it may be the employed and the unemployed of the future. We must find a new language that does not insult anyone or reduce their dignity and that gives people a role to play. Everyone should gain some benefit from the extra wealth generated by the application of the new technologies. Early retirement is one option that has been mentioned. Retraining is another option that the new wealth will allow us to exercise. If we do not go along that line, we simply will have no choice.
My hon. Friend the Member for Lincoln (Mr. Carlisle) talked about the balance between resources going to old industries and those going to the new industries. He is correct inasmuch as the Government and the Department of Industry have a responsibility to rescue and support older industries provided that they are making a genuine attempt to get back into the game of competitiveness and producutivity. That is surely a legitimate assertion to make. I cannot deny that that policy has tapped a large amount of resources for the older industries. However, if we included the contribution made to public sector

purchasing, we would find a massive expenditure—billions of pounds—on the sunrise industries.
We are all too familiar with "Micros in Schools" programme and with micro-electronics in education, the one providing hardware, the other software for most of our secondary schools and, soon, for our junior schools.
In annotating the speech of the hon. Member for Islington, Central I found myself likening him to Clive Jenkins and Ken Gill. They have made similar observations to his. Strangely enough, I suspect that many Conservatives would go along with the helpful employment and technology leaflet that was published by the TUC, although the hon. Gentleman quoted a passage that was not particularly helpful. If we can keep the consensus on the new industries, we should not have too much to fear from the senior spokesmen within the trade union movement. However, I am not so sure that those same attitudes would permeate to the chap on the shop floor who must think about individual jobs being threatened by a particular machine. I agree with many of the points made by hon. Members, particularly that made by the hon. Member for Keighley (Mr. Cryer) when he talked about the need for participation at the earliest possible stage. I know that people who sell computers often start off talking to the NALGO representative, simply because they have to.
This debate has been designed as a challenge to British industry. It is, in terms of the discipline it imposes on the House, also a challenge to the Government and to the House. The hon. Member for Islington, Central talked about the failure of Governments. That may be a serious point. It is certainly a serious assertion to make. However, I suspect that the failure of successive Governments has been one over the past two decades in which Britain has tended to operate a social market economy which has beome more and more social and less and less market. Therefore, it is exceedingly painful to redress that balance and get the wealth creation process going again.
In a helpful, moderate and gentle speech, the hon. Member for Keighley could not resist bringing in the word "exploitation". I thought that we had almost made it, but at the end he did use the word "exploitation". Should we exploit working men and women—that is the way he put it—or should we exploit the new technology? I ask the hon. Gentleman and my hon. Friends the Members for Withington and for Skipton to consider two visions of Britain in the year 2000. The first vision is one of a country—country A—with low wages, low productivity, a low national income, with people doing squalid, repetitive and dirty work, where there is squabbling over scarce resources and where there may be the political rancour that is occasionally typified in the working of the House. Let them compare that with country B, a nation where people are not doing squalid, repetitive, dirty jobs; where there is a high productivity and a high wage economy; where social programmes that have been mentioned by hon. Members can be afforded; where we have the luxury of deciding whether granny gets the stairlift, the home help and the annex instead of putting her into a home. Those versions—or visions—will be available to us provided that we take the opportunity that my hon. Friend the Member for Fife, East so skilfully put before the House some three hours ago. I have a fond, I


hope not faint, hope that with the impetus that he has started in his debate the House can play its part in seeing that it is the second version—or vision—that takes place.

Mr. Henderson: I congratulate my hon. Friend the Under-Secretary of State for Industry on his successful initial appearance at the Dispatch Box. I am grateful to him for the way in which he has replied to the debate and for his helpful points. May I also thank all hon. Members who have contributed in their several ways to the debate? In many ways they have helped to point up some of the questions in our our minds.
May I latch on to two points that arose in the debate? My hon. Friend the Member for Manchester, Withington (Mr. Silvester) talked of the way in which information technology progress can reduce the emphasis on the centre and expand the activities at the periphery. The people working at the periphery can be as well informed as the people at the centre. The geographical distribution of jobs and the way in which they are done will be affected as a consequence.
My hon. Friend the Member for Skipton (Mr. Watson) made an extremely important speech about training and retraining. We should add to that the induction of people already in work whose particular skills do not bring them into information technology. At the end of the day, if we are to increase the market share in order to maintain jobs, as we use better products or achieve greater efficiency, we shall have to place increasing emphasis on marketing. While the emphasis of the debate has properly been on technological considerations—I am particularly grateful to the hon. Member for West Lothian (Mr. Dalyell) for introducing bio-technology and other matters—at the end of the day all the business skills will be required if we are to take full advantage of the opportunities now presenting themselves.

Question put and agreed to.

Resolved,
That this House believes that job prospects will be improved if British businesses act with greater urgency to grasp the unprecedented opportunities for growth presented by developments in several fields of advanced technology; and urges Her Majesty's Government vigorously to pursue its policies to remove obstacles to growth and stimulate the development and use of new techniques and products.

Education

Mr. Tim Brinton: I beg to move,
That this House calls upon Her Majesty's Government to take steps to encourage the establishment of all possible links between the maintained and independent sectors of education at both primary and secondary levels, for the mutual advantage of both.
In the very short time available, I am afraid that that is all I can say.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): I am delighted to reply to the debate, although not at the length that I would like——

It being Seven o'clock, the proceedings on the Motion lapsed, pursuant to Standing Order No. 6 (Precedence of Government Business).

Orders of the Day — Local Government and Planning (Scotland) Bill

As amended (in the Standing Committee), further considered.

New clause 7

FIRE ESCAPES IN MULITIPLE OCCUPANCY PROPERTIES

`Subject to such conditions as the Secretary of State may by order make a local authority shall make a grant in respect of work for the provision of a means of escape from fire from a building which or part of which is let in lodgings.'.—[Dewar.]

Brought up, and read the First time.

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Mr. Donald Dewar: I beg to move, That the clause be read a Second time.
This is a modest new clause dealing with a modest but important matter which has a considerable history. Those of us who are veterans of the Local Government (Miscellaneous Provisions) (Scotland) Bill will remember that a new clause was moved in Committee—I think on 26 February 1981—in exactly the same terms as the one now before the House.
The new clause tries to place upon local authorities a duty to give some modest help with fire escape provisions in multi-occupancy properties and hostels.
The genesis of the clause is the long-term concern of a number of bodies that supply much of the hostel accommodation in Scotland. They have been co-ordinated by the Scottish Council for Single Homeless. Mr. Laurie Naumann of that organisation has argued the case with a great deal of care and proper persistence over a considerable time.
It is right that the House should spend a few minutes on the matter, because there is a great deal of anxiety on the subject in Scotland. It has been highlighted by the recent sad incident at the nurses' home in Kirkcaldy, where there was loss of life. There has been an exhaustive fatal accident inquiry into the circumstances. I have no special knowledge of the circumstances of the fire, and I am not for a moment suggesting that there was anything defective. I am not suggesting that the new clause has that sort of direct linkage or relevance, but that sad incident underlines the need to have adequate fire protection in hostels and in multi-occupancy buildings. It is to facilitate such a provision that we are anxious to have the new clause—or something that will achieve the same result—put on the statute book.
I understand that in England, in the Housing Act 1980—I think the relevant parts are paragraphs 16 and 17 of schedule 12, and schedule 24—there is a provision for mandatory grants to be made to people who are putting fire escape facilities into hostels and multi-occupancy buildings. The amount of money is comparatively small—a 75 per cent. grant, up to a maximum of £6,750, with a maximum of £9,000 in London.
Fire escape equipment can be extremely expensive. Therefore, I am not suggesting that the grants would revolutionise the position, but if there is such a mandatory duty on local authorities in England, and if we accept that

there is a crying shortage of that kind of accommodation in Scotland, the same duty should, equally, be laid on local authorities in Scotland.
I know from personal experience in Scotland some years ago that sometimes very valuable projects for the provision of hostel accommodation can be laid low by the sudden realisation of the difficulties of meeting the fire regulations. In such circumstances, it is right that there should be some similar duty laid upon local authorities in Scotland to help. Therefore, we ought to be seeking legislation similar to that which is found in the schedules to the Housing Act 1980 to which I have referred.
The debate on the issue has taken place not only in the Local Government (Miscellaneous Provisions) (Scotland) Bill to which I have referred; it surfaced during the proceedings on the Tenants' Rights, Etc. (Scotland) Bill before that. I know that there have been a large number of approaches behind the scenes, and it is in the hope that there will be some good news from the Minister that I raise the matter today.
In the proceedings in Committee on the Local Government (Miscellaneous Provisions) (Scotland) Bill, I referred to letters from a Mr. Alan Fraser, who was Lord Mansfield's private secretary, and who at that time was saying that the Scottish Development Department was giving
urgent consideration to this and other aspects of house s in multiple occupation with a view to identifying the future action which should be taken in Scotland.
I should like to quote from what was said in that debate by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). The Minister may get a little fed up with hearing quotations from the hon. Member for Pentlands, but the hon. Member left many hostages behind him when he finally bailed out to another Department. The hon. Member for Pentlands said that a review was taking place on the subject. He said:
That review is going on now, and the work is expected to be completed some time later this year. It covers not only the question of fire escapes but standard amenities and a number of other matters of importance to properties involving multiple occupation of the kind referred to in this clause. The hon. Gentleman"——
the Minister was referring to me——
is correct in saying that the statutory position in Scotland is less favourable than that south of the border, for various historical reasons … We hope that the review now in progress will come to a conclusion around October this year. It will almost certainly be necessary to consider some legislative change".—[Official Report, First Scottish Standing Committee, 26 February 1981; c. 739–41.]
That was a reference to October 1981. We are now seven months beyond that point. My information—it may be misleading—is that at the moment the contacts that have been made at official level have not been terribly encouraging in terms of suggesting that something is imminent. The hon. Member for Pentlands agreed that the situation was unsatisfactory, that there was a gap between provision in England and Scotland, and that it ought to be put right. He promised completion of the review by October 1981. What is happening, and when are we to see action?

The Under-Secretary of State for Scotland (Mr. Allan Stewart): The hon. Member for Glasgow, Garscadden (Mr. Dewar) has raised an important point. On technical grounds, I cannot accept his amendment. I do not think that he will dispute that. He has asked where we stand in terms of the review promised by my hon. Friend


the Member for Edinburgh, Pentlands (Mr. Rifkind). I can give the hon. Member for Garscadden an unequivocal undertaking that we accept the principle of the new clause, and that in another place we shall table Government amendments to meet the principle of new clause 7.

Mr. John Maxton: Will the inquiries, and any legislation that is to be introduced, cover buildings that are let as lodgings or in the form of lodgings and which are at present owned by the Government?
I have in mind the student residences at Hamilton college of education, which the Government propose to close. Those premises have been used for many years as student lodgings and they do not have any fire escapes, despite the fact that they are multi-storey buildings. I do not know whether there are any other educational buildings used for students that are in the same situation. I should like to know whether the Government will put a statutory obligation upon local authorities to make proper fire provision in their own buildings which have multi-occupancy, and in regard to buildings that may belong to the Government directly or indirectly through boards of governors, as is the case with colleges of education.
Hamilton is the only such college that I know about, and it is proposed to board up the residences at the end of July and to have nothing more to do with them. That is because the Government cannot sell them—they are asking far too high a price. There may be other student buildings that are in the same position, and the Government have an obligation towards students who are in residences to ensure that there is a proper escape from fire if it should occur. That is the lesson of the fire in the nursing home in Fife. It must be the lesson that we must learn with regard to student residences as well.

Mr. Allan Stewart: If students are in residences not owned by the Secretary of State, clearly the provisions that I am proposing would apply to such residences. As for residences owned by the Secretary of State, there is a duty on the Secretary of State to provide appropriate fire escapes for such buildings. However, I shall examine that point to ensure that there are none of the technical difficulties to which the hon. Member has referred.

Mr. Dewar: I welcome what the Minister has said—it would be ungracious of me not to do so. That was a helpful start to this evening's proceedings. The Minister has done well and I thank him. Therefore, I beg to ask leave to withdraw the clause.

Motion and clause, by leave, withdrawn.

New Clause 8

SECTION 2 OF THE LOCAL GOVERNMENT (MISCELLANEOUS PROVISIONS) (SCOTLAND) ACT 1981

`No power conferred by section 2 of the Local Government (Miscellaneous Provisions) (Scotland) Act 1981 shall be used in connection with the valuation or revaluation of lands and heritages which takes place, or is due to take place in the year 1983.'.—[Mr. Dewar.]

Brought up, and read the First time.

Mr. Dewar: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to take the following amendments: No. 10, in page 4, line 24, leave out clause 4.

No. 11, in clause 4, page 4, line 35 at end insert—
'(1A) In an order under subsection (1) above different provision may be in respect of a class or classes of machinery, machines or plant in different rating articles.'.

No. 12, in clause 4, page 4, line 35 at end insert—
'(1A) In any alteration which the Secretary of State may make in section 42 of the Lands Valuation (Scotland) Act 1854, the Secretary of State will make good the loss in real income to the appropriate local authority by additional resources element'.

Mr. Dewar: This is an extremely complicated matter, although the new clause is deceptively simple. I do not expect that the Government will be in favour of the new clause in principle, or in any other way, because they have made it plain that they intend to apply section 2 to the 1983 revaluation and that exempted from that revaluation in the quinquennial review will be domestic property. We had a debate on the matter when we discussed the Valuation (Scotland) Order 1982 in the Sixth Report from the Select Committee on Statutory Instruments on Wednesday 31 March.
On that occasion, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who once again darkens our door, made it clear that the reason for the partial revaluation rather than for the revaluation was the publication of Cmnd. No. 8449, which deals with the alternatives to the rating system. I regard that as a dreek and drear document. It seems to analyse with gloomy relish the difficulties, but comes up with no helpful solution. If they postpone the revaluation of domestic properties on the basis of what is in that discussion document, the Government will be making a mistake. It will be a long time before any workable alternative is evolved.
The alternative with the most popular support is that of some form of local income tax. In terms of the Government's discussion paper, that would not be implemented before the 1990s. Postponement of the revaluation is bad because, as I have explained before, it means that distortions between domestic ratepayers remain. For example, someone living in a house that has suffered from a change of environment and therefore a change of property and rentable value, and is over valued, will, because there is no revaluation, have no way in which his rateable value can be adjusted as against other domestic properties in the section. The distortions and the ambiguities of the system will become more perceptible.
7.15 pm
It will be argued and feared that the whole thing may have been mounted for this whole reason. It will be argued that some people will imagine that the postponement of revaluation of domestic property will be in some way a help to domestic property owners as a whole. That is not true because, as we know, the percentage of the total money raised by rates that comes from domestic properties will have to remain the same. There is no way, as a result of this manoeuvre, that domestic ratepayers will pay a smaller percentage of the total rates.
I fear that in the domestic sector there will be a number of anomalies and inflexibilities, and a number of, perhaps minor but still irritating, injustices that cannot be put right as they would have been by the regular quinquennial revaluation. The Scottish assessors in local government


have kept to these regularly. There was one small gap because of the reorganisation in 1975 and our record is infinitely better than that south of the border.

Mr. Michael Ancram: Would the hon. Gentleman say from his experience that the result of revaluation, on average, is to bring down or raise valuations? That is a salient point.

Mr. Dewar: I do not think that that is a salient point. What frightens one is the amount of money that has to be raised from rates, which is a question of rate poundage.
At the moment the domestic ratepayer provides about 30 per cent. of the total rateable value and the non-domestic about 65 per cent. If we accept the premise that often comes from Conservative circles that the domestic ratepayer is paying too high a percentage at the moment, there is nothing in the proposals made by the Government that will help that. Exactly the same percentage will have to be raised from the domestic ratepayer as was raised last time. Therefore, that premise is fraudulent. The Under-Secretary of State for Scotland might not wish to do this, but some of his colleagues are less careful. It would be fraudulent to give the impression that in some way this will help the domestic ratepayer.
I wish to ask the Minister one or two simple questions. They are simple in that they are easy to ask but perhaps they are not so easy to answer. The Under-Secretary will have to introduce, following on the Valuation (Scotland) Order 1980, a further order. There will have to be a chance to discuss the machinery because we shall have to know the method by which the next annual value of specified land is to be adjusted and also the method by which the net values of unspecified lands and heritages are to be adjusted. That is a matter of a great deal of speculation and interest.
It will be helpful if the Minister will say a few words about how his thoughts are tending in this matter. It is mysterious and obscure. We know that the Scottish Valuation Advisory Council has already been consulted and that COSLA is being consulted now, although I am not sure whether that has been concluded. I hope that the Minister can give us some updating on that and explain how matters stand at the moment.
Perhaps the Minister can also tell us whether he is thinking about applying a multiplier to domestic values or a divider to non-domestic values. That is a simple proposition. There might be a combination of both, but the way in which this is done is a matter of real importance. It would also be helpful if the Minister could give us some indication in principle. There is also an important argument in which I am interested, and on which the House may be interested to hear the Minister's thoughts about the unit in which the ratio between non-domestic and domestic is to be preserved.
I understood—looking back on the previous debates I think that I am on good grounds—that as the statute had been drawn, the unit was based on the assessor's area. In Scotland this is usually the region, but the hon. Member for Pentlands poured some scorn on me for that. He suggested, during the statutory instrument debate, that he could not understand how I had got that idea and said that it could not be done on the basis of the responsibilities of the assessor and the area for which he is responsible, but might be done on a district basis alone.
It would be useful if the Minister would tell us whether he is going for the smaller unit or whether he would do it

on the assessor's area—that is, on a regional basis. I should have thought that there was a case for going for the smaller area to avoid distortion. One can easily construct models, for example if one goes for the whole of Strathclyde, where the inflexibilities might become apparent and people might be victimised as a result. It will be important for the Minister to say a word or two about that.
Will the Minister also say a word about how the domestic element in the rate support grant will be affected? That will have a knock-on effect on the resources element. It will help if the Minister will say something on that subject.
I hope, too, that the Minister will give us a quick resume of the advice that is emerging at present and how his thoughts are crystallising—that is, if they are crystallising. What happens, for example, if new properties are built, or have been built since the last revaluation, or will appear on the roll for the first time? If properties previously on the roll had been demolished, how do we handle that in maintaining the ratio between domestic and non-domestic property?
Perhaps the Minister will also say something about the time scale. It is getting short. We all know that 1983 is close in terms of the amount of work that has to be done by assessors in preparing the new valuation roll. Appeals are still grinding on from the last quinquennial revaluation, and the time limit is constantly having to be extended on appeals. There is considerable anxiety about the time scale.
I am conscious of the enormous amount of business that we have to get through tonight. I realise that this is not an area of great interest and that we may soon see a specific order in this connection. However, if the Minister can help us, it will enable us to have a better informed discussion of the options and leave us better prepared to face the further orders when they ultimately materialise.

Mr. John Home Robertson: On a point of order, Mr. Deputy Speaker. Am I correct in saying that with new clause 8 we are also discussing amendments Nos. 10, 11 and 12 relating to clause 4?

Mr. Dewar: I apologise to my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) and others who have a constituency interest. I think that my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) hopes to speak on that point.

Mr. J. Grimond: I wish to return to the powers granted under the Bill to the Secretary of State to make orders de-rating outdoor plant and machinery. I have read the Committee proceedings, and I am convinced by the Government's own words that it is apparent that this power is unnecessary, pointless and damaging.
In Committee the hon. Member for Aberdeenshire, East (Mr. McQuarrie), speaking on behalf of himself, on my behalf and on behalf of my constituents, for which we are most grateful, asked that Orkney and Shetland should be omitted. To that, the well-known oracle, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), in his previous incarnation at that time, replied for the Government:
That cannot seriously be considered for the obvious reason that Orkney and Shetland are the two areas where the anomaly


is most apparent. The sums involved arise because of the high degree of external plant in those areas. If they are excluded from any such change, there will be little point in making that change".—[Official Report, First Scottish Standing Committee, 11 February 1982; c. 413.]
I repeat what the Minister said, that, apart from Orkney and Shetland, there is little point in making the change. It was clearly stated that the only part of Scotland to which this would make any significant difference was Orkney and Shetland. That is true. If the Government made an order now, over half of the total rateable value lost would be in Orkney and Shetland. They would lose about £17 million, and the whole of the rest of Scotland would lose only about £14 million.
What will the effect be? If Orkney and Shetland were large and rich areas with a substantial population and industry, it would, of course, be of considerable benefit to the industry that is derated—in this case, the oil industry—and the burden would be spread over a large rateable value and thus not be severely felt. In other parts of Scotland the effects will be felt to some extent, but to nothing like the same extent as in Orkney and Shetland, as the Government themselves say. Of course Orkney and Shetland are not large and rich rateable areas, and the effect will be the exact opposite of what it should be. The oil industries are the biggest contributors to the rates, and they themselves will have to make up a large percentage of the increase in rate poundage when necessary from the derating of their external plant and machinery. They are the only big ratepayers.
The remainder of the extra burden will be shared by the wretched Shetlanders and Orcadians who, by normal standards, are poor and few in numbers. The result will be a comparatively small benefit to the oil industry, which is not interested in the type of relief, which is small compared with their general revenue, but it will be a serious blow to the other industries and inhabitants of Orkney and Shetland. Unless remedial measures were taken the rates will rise by 141 per cent. in Orkney, or 97p in the pound, and by 45p in the pound in Shetland.
These areas have undertaken a lot of extra expenditure, not for the benefit of the Orkneys and Shetlands, but for the benefit of the British economy as a whole. The position would be intolerable. The Government now propose a scheme which will do something to offset the effect of their own legislation. We are, of course, grateful for that, but it is a strange way to govern the country to amend legislation that will have a significant effect in only one part of the country, and then bring in complicated measures to offset its effects in that particular part of the country.
I realise that the argument is that it brings it into line with England, but it is a highly bureaucratic and theoretical approach to legislation to bring in an extremely complicated scheme to offset a difficulty of the Government's own creation, which will have almost no beneficial effects on anyone and which will be very damaging to the people of Orkney and Shetland. Unfortunately, it is typical of the way in which much of our government is carried out.
I do not propose tonight to go into the Government's proposals in the discussion document. As I said, we are grateful that they are to discuss the matter, but there will have to be substantial help, or it will be a great blow to

Orkney and Shetland at a time when employment there is declining and the outlook, as in the rest of Britain, is far from good.
The whole exercise appears pointless. The oil industry is not very interested. In other parts of Scotland, on the Government's own showing, it will have virtually no effect. In the one part of Scotland where it will be effective, the effect will be damaging, and so damaging that there will have to be a complicated scheme to set it right.
This is not the time to go into the proposals. I thank the Government for having sent me a copy of them. I emphasise that this is a very strange form of government, and I beseech the Government, when they implement the proposals, to take into account the extremely damaging effect that they will have on my constituency. In my view, it would be better to accept amendment No. 10 and withdraw the clause.

Mr. Gordon Wilson: I wish to say a word or two about the postponement of revaluation for domestic properties. The Government owe the House an explanation of when the revaluation will take place and what their proposals are on rating reform. Several years ago the Government promised that the rating system would be abolished, yet we now have this postponement of the revaluation of domestic properties.
I agree with the hon. Member for Glasgow, Garscadden (Mr. Dewar) that the postponement of domestic revaluation will lead to distortions within the system. The whole object of regular revaluation is to iron out differences that may have appeared and to take into account changes that may have occurred in housing standards or in the environmental surroundings and to get equality between ratepayers. It serves no useful purpose to freeze valuations at a certain level and not change them after a period. One might just as well get rid of domestic rating altogether; otherwise one is perpetuating distortions in a system that benefits some ratepayers and has an adverse effect on others.

Mr. Jim Craigen: Does the hon. Gentleman think that perhaps a political calculation was made at the time of postponement because it was assumed that a general election would follow shortly after the revaluation? Revaluation is never popular.

Mr. Wilson: It is true that revaluation can be unpopular. Valuation should not be confused with rate poundage, but many householders get a fright when they receive revaluation notices, although in relative terms some may be better off than others. We all know that some local authorities take advantage of new valuations to increase their rates, but give the impression of making reductions. If that happens, presumably they figure on the Government's hit list, because, as I see it, most of these gaps have already, in many cases unfortunately, been closed.
My understanding is that the Government are seeking to freeze values at certain rates. They will not allow for any difference in weight to be placed on commercial and industrial properties vis-a-vis domestic properties. En each quinquennial revaluation there are shifts within the overall values between one class of property and another, so it makes no sense for the Government to take that view. I


assume that they have deliberately done so because of the proximity of the revaluation date to a general election, as the hon. Member for Glasgow, Maryhill (Mr. Craigen) said.
The report of the Public Expenditure Committee and the public expenditure White Paper show that the Secretary of State's share of public expenditure in the United Kingdom will drop from the 1980 figure of 5·65 per cent. to 5·05 per cent. by 1985. Whatever other complicated calculations the Government have in mind, there will be less money available at central level for the unfortunate councils, who will have to bear much of the blame for the rate increases. However, that is an argument separate from what the Government intend to do.
Therefore, I put this simple question to the Government: when do they propose to resume the revaluation of domestic properties? If they do not propose to do so, when do they expect to come forward with a more equitable alternative to the rating system for bearing the appropriate proportion of public expenditure incurred by local authorities?

Mr. Martin J. O'Neill: I speak to amendment No. 10. The right hon. Member for Orkney and Shetland (Mr. Grimond) was not correct in assuming that his constituency would be the only part of Scotland to be affected by clause 4. Central region and the Falkirk district will be affected. The state of the economy in Falkirk is a great deal more parlous than the relatively buoyant situation that prevails in Orkney and Shetland.
The Minister kindly circulated the consultative document just in time for our previous debate, which was so rudely interrupted. The document covers most of the points that were raised in Committee. It provides a useful outline for discussion. The provisions for derating are clearly stated and the compensation for loss of rate income is covered in a manner that I believe will be intelligible to those who wish to take the time to read it.
However, we must recognise that the derating of plant and machinery will cause considerable headaches in the local authorities concerned. The Minister gives options for local authorities and the CBI. As regards the 11·3 per cent. drop for Falkirk district, the 57 per cent. drop for Shetland and the 141 per cent. drop for Orkney, I hasten to add that in some respects these figures mask a slightly different reality. None of the three authorities concerned—the islands authority, Falkirk district and Central region—will be very happy with any of the options open to them. Tapering arrangements, similar to past arrangements where there have been major readjustments, would depend on the length of taper—the length of time that the transitional arrangements take to be carried through.
The option of rerating would create considerable problems for existing ratepayers and is, perhaps, the option that has been least well documented as regards its impact. I know that in Central region, on a simple basis of comparison between one side of the Forth and the other, it was suggested that there would be difficulties for people who are not at present affected. Rerating might well create difficulties of a kind that the present anomaly already creates. I am not too happy about that.
Raising funds by means of a taper, perhaps by redistribution within the whole of Scotland, would not commend itself too much to the other authorities and

ratepayers who will be affected. It would in some respects disadvantage areas that already have problems and that would not take kindly to rate increases.
The Minister has not raised an increase in rate support grant as an option. I should have thought that that would be considered somewhere along the line. There should have been at least a mention of the possibility of an increase in rate support grant to meet this anomaly. The Labour Party's position has always been clear. We are not opposed to correcting the anomaly. We recognise that some industrial enterprises are at a disadvantage. However, if there is no increase in rate support grant, someone else will have to pay. The Government are apparently anxious to help the firms involved and I freely concede that in many instances the total area of operation of those firms is not great.
Indeed, the Minister has been heavily lobbied in the past by the organisations concerned and there has been a campaign to have the anomaly removed.
The Minister should look again at the last, missing, option from his paper. The paper goes a long way towards covering most of the points raised in Committee, but the last option, of increases in the rate support grant, has not been considered. It would go some way towards allaying the fears of Scottish local authorities and at the same satisfy the firms concerned. Until the Minister is prepared to consider that option, I would not wish to prejudge the outcome of the consultative processes. We are not happy about the gap. The appropriate step would be to vote against any order that arises. Therefore, we shall not press the amendment to a vote.
We are grateful to the Minister for having produced the document. If the amendment had not been tabled the Minister might not have been so quick to publish it. However, I might be doing him an injustice. I know that this is the fourth or fifth time that we have had an opportunity to discuss the matter. If the issue is of such great concern to the right hon. Member for Orkney and Shetland he could have tabled amendments accordingly. We shall not press our amendment to a Division, but we hope that the Minister will not lose sight of the point that if the anomaly is to be corrected, the Government must consider the last option—which they have chosen to ignore so far—of compensating local authorities that suffer a reduction in rate income by an increase in rate support grant, that is not made at the expense of any other local authority in Scotland. Until the Minister is prepared to consider and accept that, we shall not be prepared to support the correction of the anomaly as outlined in the paper.

Mr. Home Robertson: Many of us realised that my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) was moving to the right, but it caused great alarm when he moved an amendment calling on us to leave out clause 4. However, the penny has now dropped and we realise that he is seeking not to water down the basic principles of Socialism, but to avoid giving any additional power to the Secretary of State. Clause 4 gives the Secretary of State further powers to place orders before the House concerning the definition of "lands and heritages" in respect of fixed machinery for rating purposes in Scotland.
Far be it from me to defend any aspect of the rating system. It is a fairly ludicrous way of raising revenue. However, the rating system is the only independent source


of revenue for local authorities in Scotland. Therefore, all industries, individuals and businesses should be liable to contribute towards that revenue. I speak on behalf of an area that is largely concerned with agriculture. The derating of agriculture puts a considerable additional burden on other ratepayers in the area. It stands to reason that the derating of one industry throws an additional burden on other ratepayers in the area.
If the clause is accepted, any further exemption would presumably impose further burdens on other ratepayers. We know that the oil industry is very rich. A couple of weeks ago we received the report of BNOC, which stated that the operating profit in 1981 was £465·2 million. Much of that went to the Government in the form of petroleum revenue tax and so on, but it is surely only fair that local authorities that have to deal with some of the burdens imposed should receive some share of that revenue. Offshore installations are already exempted. I think that Fife tried to collect rates for offshore installations, but discovered that for some legal reason or other they were exempt.
We are given to understand that the Secretary of State for Scotland intends to extend exemption from rating to fixed equipment and pipework outside buildings. What sort of precedent are we setting? We recognise that the Government want to reduce the level of rates charged on BP at Grangemouth for external plant and machinery. However, external plant and machinery are not the exclusive preserve of the oil industry. All hon. Members can think of industries that have external plant and machinery. I think immediately of mines, quarries and breweries, where there is a great deal of external plant and machinery. How will the orders that the Secretary of State proposes to lay in pursuance of clause 4 be drafted? Will there be a whole series of exemptions for umpteen factories all over the place? What impact will that have on the rating resources of local authorities that have many factories or businesses within their boundaries with significant amounts of external plant and machinery? If the Secretary of State does not intend to increase rate support grant for areas affected in that way, I doubt whether we should accept the clause or any of the consequential orders.

Mr. Allan Stewart: I shall deal first with the points raised on new clause 8. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, the background to the partial revaluation proposals is the Government's wish to reform domestic rates. It would not be sensible to go ahead with the revaluation of domestic rates if the system is likely to be reformed in the near future. However, I entirely accept his general point about the advantages and desirability of regular revaluations. I agree with the tribute that he paid to the work done in Scotland.
I should like to pick up a point made by the hon. Member for Dundee, East (Mr. Wilson) about what the Conservative Party said before the last election. It was before the 1974 election that the Conservative Party had a clear commitment to abolish the domestic rating system in the following Parliament. As the hon. Gentleman will recall, the Conservative Party did not win that election. Before the last election, we made it clear that reform of

domestic rates had to take second place to the need to improve incentives and to reduce direct taxation—[Interruption.]—during the period of a Parliament.

Mr. Ancram: Will my hon. Friend give an assurance that his remarks do not in any way diminish the intention of the Conservative Party and the Government to find a way of reforming rates to make them more equitable?

Mr. Stewart: I am happy to give my hon. Friend that assurance. I sought to make clear to the hon. Member for Dundee, East what the Conservative Party said before the last election and what it said before the 1974 election.
Technically, new clause 8 would create a nonsensical situation, because a partial revaluation in 1983 has been prescribed in the Valuation (Scotland) Order 1982. If the provision were approved, my right hon. Friend the Secretary of State could not revoke the present order or deal with matters consequential to it. Obviously, that would be an unsatisfactory state of affairs. It seems to have been suggested that new clause 8 will not be pressed to a Division and that the purpose of moving it was to discover the position on several technical matters and the position on timing for the partial revaluation.

Mr. Gordon Wilson: The question asked by the hon. Member for Glasgow, Garscadden (Mr. Dewar) and me was about the timetable for the changes. in view of the interesting discourse between the Minister and the chairman of his party, what is the Government's programme for making those changes and how long will the frozen revaluation system last?

Mr. Stewart: The hon. Member for Dundee, East is referring to the decisions on the alternatives to the domestic rating system. The position on that is clear. We issued a Green Paper setting out the facts, figures and options and the arguments for and against. A period of consultation has just been completed and we are now considering the many responses to the Green Paper. Obviously, the Government wish to reach conclusions as soon as they reasonably can.

Mr. George Foulkes: It would be helpful to the House, although we know that the Minister cannot predict what the Government will say, if he could tell us whether, in all the representations that have been received about the Green Paper, any new suggestions or ideas have been submitted that were not included in the evidence to Layfield.

Mr. Stewart: I have not recently read all the evidence to the Layfield committee, but I can tell the hon. Member for South Ayrshire (Mr. Foulkes) that a wide variety of proposals were put forward by those who responded to the Green Paper.
The hon. Member for Garscadden asked me where we were on some technical points in relation to partial revaluation. He asked me about the region or district basis and the multiplier on domestic values or the divisor on non-domestic values as the appropriate method of adjusting net annual values to preserve the balance between domestic and non-domestic values. My right hon. Friend and I recently consulted the convention on that matter. The convention asked the Government to reconsider the decision to hold a partial revaluation and postpone it to a later date, when a complete revaluation should be held. I cannot answer the hon. Gentleman's question on the details. They were put to the convention.

Mr. Dewar: That information is extremely interesting. According to the Minister, CoSLA asked that the partial revaluation should be abandoned in favour of postponement. Is the Minister considering that option? If he is not, I do not see why the fact that that point of view was raised should have delayed consideration of the practical matters that I raised with him.

Mr. Stewart: It has not delayed consideration of the practical matters because I put the paper to the statutory meeting of the convention on 23 April. There seem to be strong arguments for the divisor as being less disruptive than the multiplier for domestic values.
Amendment No. 10 was tabled by the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill). May I say to the right hon. Member for Orkney and Shetland (Mr. Grimond) that there is a clear anomaly in the rating of plant and machinery, whereby external plant in Scotland carries a heavy rate burden that is not carried by similar indoor plant in Scotland or outdoor plant in England. It is widely accepted that that anomaly is serious. The right hon. Gentleman rightly talked about the position in Orkney and Shetland, but the point also applies to Moss Morran. As the hon. Member for Berwick and East Lothian (Mr. Home Robertson) said, it does not apply solely to the petrochemical industry. The hon. Member for Dunbartonshire, East (Mr. Hogg) will confirm that there is a firm in his constituency whose problems he drew to the attention of the Committee during discussions on local government legislation last year. In fairness to industry, there is a clear anomaly that could discourage investment in Scotland as against investment in England. We must try to remove that anomaly. This enabling clause would give the Secretary of State the right to bring forward an order to do that.
We are not only discussing an enabling order. As soon as an order comes forward, the House can discuss the details. We are now consulting the convention, the CBI and the assessors about the complex questions of the definition of plant to be derated. However, I can tell the hon. Member for Berwick and East Lothian that a draft definition has been put forward in the consultative document by the Scottish Assessors Association to meet the anomaly, which is purely historic.
The special position of Orkney and Shetland is recognised in the consultative document and is dealt with in paragraph 5.7. Certainly the Government recognise the position in that area and we are anxious to achieve a generally acceptable solution to the problem. However, the problem is not unique to Orkney and Shetland. That area would have the highest value of such plant and machinery of any local authority in Scotland, but the point applies to Moss Morran and many other places. It also applies to potential investment that might take place anywhere in Scotland.
The hon. Member for Clackmannan and East Stirlingshire suggested that any loss of rate income suffered by a local authority should be made good by an increase in the rate support grant. The loss of rating resources from derating plant and machinery cannot be considered in isolation. We must consider many factors, to some of which he referred in his constructive remarks.
The first point is that the rating resources available to authorities are already taken into consideration in fixing the level of rate support grant annually. The calculation includes the normal annual growth of rateable value due

to new developments, which is the same as the prospective loss of rateable value from derating external plant. Secondly, derating of external plant may logically result in some rerating of internal plant, much of which is at present exempt from valuation. The hon. Gentleman made that point and we are anxious to receive the views of those concerned.
Thirdly, by the use of industrial derating the rate burden on Scottish industry is kept in balance with that of industry in England and Wales. If the rate burden on Scottish industry were to rise or fall significantly relative to England and Wales, the Secretary of State must take that into consideration when fixing the level of derating. It is possible that the derating of external plant and machinery would not result in a net loss of rated income but in a redistribution of the same rate burden in the industrial sector.

Mr. O'Neill: The Minister said that there may not be a reduction in rate income. Does he know what the reaction of the Scottish CBI to that would be, because its support has always been conditional on the fact that some of its members would receive a reduction while others would be left untouched? That would add a dimension of which I am sure that it was not aware.

8 pm

Mr. Stewart: The matter is clear in the consultation document. We have not yet received the CBI's response to that document. The CBI is one of the main bodies that we are consulting. I cannot anticipate what it will say.
It is likely that a few local authorities in areas with much plant and machinery may not qualify for the resources element of the rate support grant. They may suffer a significant drop in rate income from derating external plant. For that reason we shall discuss possible transitional arrangements with the convention to ensure that no authority suffers unduly from sudden change.
We have circulated the consultation document to which the hon. Member for Clackmannan and East Stirlingshire referred. The matter is complex and has been considered a number of times. We now await the reactions of the convention and the CBI to the complex issues before we take a further step by introducing a specific order to deal with the important problem.

Question put and negatived.

New Clause 9

EXCEPTION TO RIGHT TO BUY

'In place of subsection 11C of section 1 of Tenants' Rights Act (Scotland) 1980 (which lists the exceptions to the sec ire tenants' rights to purchase), there shall be inserted the following—
(c) where the dwelling house has features which are substantially different from those of ordinary dwelling houses and which are designed to make it suitable for occupation by physically disabled persons;
(C) (c) where the dwelling house is one of a group of dwelling houses which it is the practice of the landlord to let for occupation by persons of pensionable age and a social service or special facilities are provided in close proximity to the group of dwelling houses for the only or main purpose of assisting those persons."'—[Mr. Millan.]

Brought up, and read the First time.

Motion made and Question put, That the clause be read a Second time:—

The House divided: Ayes 85, Noes 151.

Division No. 150]
[8 pm


AYES


Archer, Rt Hon Peter
Kerr, Russell


Atkinson, N.(H'gey,)
Lambie, David


Bidwell, Sydney
Litherland, Robert


Booth, Rt Hon Albert
Mabon, Rt Hon Dr J. Dickson


Boothroyd, Miss Betty
McCartney, Hugh


Bray, Dr Jeremy
McGuire, Michael (Ince)


Brocklebank-Fowler, C.
McKay, Allen (Penistone)


Brown, Ron (E'burgh.Leith)
McKelvey, William


Buchan, Norman
MacKenzie, Rt Hon Gregor


Callaghan, Jim (Midd't'n&amp;P)
Maclennan, Robert


Campbell-Savours, Dale
McNamara, Kevin


Canavan, Dennis
McTaggart, Robert


Carmichael, Neil
Marks, Kenneth


Clark, Dr David (S Shields)
Marshall, D (G'gowS'ton)


Cocks, Rt Hon M. (B'stolS)
Maxton, John


Cowans, Harry
Maynard, Miss Joan


Craigen, J.M.(G'gow, M'hill)
Millan, Rt Hon Bruce


Cryer, Bob
Morris, Rt Hon C. (O'shaw)


Dalyell, Tam
O'Neill, Martin


Deakins, Eric
Owen, Rt Hon Dr David


Dean, Joseph (Leeds West)
Pavitt, Laurie


Dewar, Donald
Powell, Raymond (Ogmore)


Dixon, Donald
Ross, Ernest (Dundee West)


Dormand, Jack
Sever, John


Dunwoody, Hon Mrs G.
Skinner, Dennis


Eadie, Alex
Snape, Peter


Eastham, Ken
Soley, Clive


Ellis, R. (NED'bysh're)
Spriggs, Leslie


Evans, Ioan (Aberdare)
Stoddart, David


Ewing, Harry
Strang, Gavin


Faulds, Andrew
Thomas, Dafydd (Merioneth)


Foulkes, George
Tinn, James


Ginsburg, David
Wainwright.E. (DearneV)


Grimond, Rt Hon J.
Welsh, Michael


Hamilton, W. W. (C'tral Fife)
White, Frank R.


Hardy, Peter
White, J.(G'gowPollok)


Harrison, Rt Hon Walter
Whitlock, William


Haynes, Frank
Wilson, Gordon (DundeeE)


Hogg, N. (EDunb't'nshire)
Woolmer, Kenneth


HomeRobertson, John
Young, David (BoltonE)


Hooley, Frank



Howells, Geraint
Tellers for the Ayes:


Hughes, Robert (Aberdeen N)
Mr. James Hamilton and


Janner, Hon Greville
Mr. George Morton.


Johnston, Russell (Inverness)





NOES


Alexander, Richard
Cope, John


Alison, Rt Hon Michael
Corrie, John


Ancram, Michael
Cranborne, Viscount


Arnold, Tom
Dean, Paul (North Somerset)


Aspinwall, Jack
Dorrell, Stephen


Atkins, Rt Hon H.(S'thorne)
Douglas-Hamilton, LordJ.


Atkins, Robert(PrestonN)
Dover, Denshore


Atkinson, David (B'm 'th,E)
Dunn, Robert (Dartford)


Beaumont-Dark, Anthony
Emery, Sir Peter


Benyon, Thomas (A'don)
Fairbairn, Nicholas


Berry, Hon Anthony
Fairgrieve, SirRussell


Best, Keith
Faith, Mrs Sheila


Bevan, David Gilroy
Fenner, Mrs Peggy


Biggs-Davison, SirJohn
Fisher, SirNigel


Blackburn, John
Fletcher, A. (Ed'nb'gh N)


Bonsor, SirNicholas
Fletcher-Cooke, SirCharles


Boscawen, Hon Robert
Fookes, MissJanet


Bright, Graham
Fowler, Rt Hon Norman


Brinton, Tim
Gardiner, George ('Reigate)


Brotherton, Michael
Garel-Jones, Tristan


Brown, Michael (Brigg&amp;Sc 'n)
Goodhart, SirPhilip


Bruce-Gardyne, John
Goodlad, Alastair


Budgen, Nick
Greenway, Harry


Cadbury, Jocelyn
Griffiths, Peter Portsm 'thN)


Carlisle, John (LutonWest)
Grist, Ian


Chapman, Sydney
Gummer, JohnSelwyn


Clarke, Kenneth (Rushcliffe)
Hamilton, Michael (Salisbury)


Cockeram, Eric
Hampson, Dr Keith





Hannam, John
Parkinson, Rt Hon Cecil


Haselhurst, Alan
Parris, Matthew


Hawkins, Paul
Peyton, Rt Hon John


Hawksley, Warren
Pollock, Alexander


Hayhoe, Barney
Prentice, Rt Hon Reg


Heddle, John
Price, Sir David (Eastleigh)


Holland, Philip (Carlton)
Proctor, K. Harvey


Hunt, David (Wirral)
Renton, Tim


Hunt, John(Ravensbourne)
RhysWilliams, SirBrandon


Hurd, Rt Hon Douglas
Rippon, Rt Hon Geoffrey


Jopling, Rt Hon Michael
Roberts, M. (Cardiff NW)


Kellett-Bowman, MrsElaine
Rossi, Hugh


Kimball, SirMarcus
Rost, Peter


Knight, Mrs Jill
Sainsbury, Hon Timothy


Knox, David
Shaw, Giles (Pudsey)


Lawson, Rt Hon Nigel
Sims, Roger


Lee, John
Speller, Tony


LeMarchant, Spencer
Spence, John


Lennox-Boyd, Hon Mark
Spicer, Michael (S Worcs)


Lester, Jim (Beeston)
Sproat, Iain


Lloyd, Peter (Fareham)
Stainton, Keith


Loveridge, John
Stanbrook, Ivor


Lyell, Nicholas
Steel, Rt Hon David


Macfarlane, Neil
Stevens, Martin


MacKay, John (Argyll)
Stewart, A. (E Renfrewshire)


McNair-Wilson, M. (N'bury)
Stradling Thomas, J.


McQuarrie, Albert
Temple-Morris, Peter


Major, John
Thomas, Rt Hon Peter


Marlow, Antony
Thompson, Donald


Mates, Michael
Thorne, Neil (IlfordSouth)


Mather, Carol
Thornton, Malcolm


Maude, Rt Hon Sir Angus
Townend, John(Bridlington)


Maxwell-Hyslop, Robin
Trippier, David


Meyer, Sir Anthony
van Straubenzee, Sir W.


Mills, Iain (Meriden)
Viggers, Peter


Mills, Peter (West Devon)
Waddington, David


Moate, Roger
Walker, B. (Perth)


Monro, SirHector
Walker-Smith, Rt Hon Sir D.


Montgomery, Fergus
Wall, SirPatrick


Morrison, Hon C. (Devizes)
Waller, Gary


Mudd, David
Watson, John


Murphy, Christopher
Winterton, Nicholas


Myles, David
Wolfson, Mark


Needham, Richard
Young, SirGeorge (Acton)


Newton, Tony
Younger, Rt Hon George


Normanton, Tom



Onslow, Cranley
Tellers for the Noes:


Osborn, John
Mr. Archie Hamilton and


Page, John (Harrow, West)
Mr. Ian Lang.


Page, Richard (SW Herts)

Question accordingly negatived.

Clause 1

PROPOSALS FOR REDUCTIONS IN LOCAL AUTHORITIES' RATES

Mr. Bruce Milan: I beg to move amendment No. 1, in page 1, line 7, leave out clause 1.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 2, in page 2, line 4, at end insert—
`(aA) In subsection (I A)(a)(iii) at end add "and he shall have specific regard for the principles and protection of local democracy in reaching any such decision and".'.

No. 3, in page 2, line 9, after 'grant', insert—
`but any such decision to leave out of account any category of estimated expense or to vary such categories according to whether the proposed reduction under this section is of a rate or of the amount of an element of rate support grant shall be implemented by statutory instrument and such statutory instrument shall have no effect until approved by resolution of each House of Parliament.'.

No. 4, in page 2, line 14, after 'above', insert—


`and is also satisfied that any proposed reduction in expenditure can be achieved by the local authority without the withdrawal or impairment of statutory and other essential services'.

No. 5, in page 2, line 15, leave out 'or in addition to'.

Mr. Milan: We have objected to clause 1 all the way through. We continue to object to the clause as a further attack on local democracy. We take the view that the Secretary of State already has not just sufficient power but excessive power over the actions of local authorities under the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. That Act gave the Secretary of State the power, which he has exercised in a number of cases, to reduce the rate support grant payable to any individual local authority as well as to impose penalties on local authorities generally. In effect, it forced local authorities, against their better judgment, and contrary, in our view, to the principles of local democracy, to reduce their expenditure and, in effect, to substitute the Secretary of State's judgment for their judgment about what is right in terms of services and rates for their areas.
The 1981 Act was unprecedented in local authority legislation. Until the Government introduced the measure it was always recognised that Governments of the day had a responsibility, and certainly the right, to take a view about local government expenditure, and in particular to take a view about the Government's contribution through the rate support grant to local authority expenditure.
It was also recognised before the 1981 Act that local authorities had the right, once the Government had taken their view, to determine the overall level of their expenditure and what they would levy by way of rates. If that sort of power is not available to local authorities, it is difficult to understand why we have them. Local authorities should exercise their judgment on the most important issues that face them as duly elected bodies.
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Clause 1 extends centralisation. It gives the Secretary of State power to reduce local authority expenditure and the rate support grant. More important, it gives him the power, in effect, to determine the local authority rate, over the head of the local authority and against its wishes. The clause will enable the Secretary of State to substitute a rate that has been fixed by him for the rate fixed previously by the authority. Once we have this power in the hands of the Secretary of State, local democracy as we have known it will disappear. That view is also held by CoSLA. It is not confined to the Labour members of CoSLA. It is held also by the Tory members.
Amendment No. 1, which is the principal amendment, would remove clause 1 from the Bill. However, if that does not happen, certain amendments can be made that will provide some protection for local authorities against the Secretary of State's dictatorial powers.
Amendment No. 2 would ensure that the Secretary of State had regard to the principles and protection of local democracy in exercising his powers when the Bill became law. If the right hon. Gentleman were interested in the least in protecting local democracy the Government would have no difficulty in accepting the amendment. I am not optimistic that he will accept the amendment, because in exercising his powers under the 1981 Act he has demonstrated that he has little regard for the protection of local democracy. However, if we are to have sweeping and unprecedented powers in legislation, qualifications

and conditions should be written into it to which the right hon. Gentleman should have regard before exercising his powers, and amendment No. 2 would do just that.
Amendment No. 3 would represent a reduction in the sweeping and untrammelled powers that the Secretary of State has given himself in the clause. When deciding whether to exercise his powers he can decide to leave out certain categories of expenditure and to have regard to other categories. Those decisions will not be subject to any control. When we discussed certain orders under the 1981 Act it was striking that the right hon. Gentleman failed adequately to explain the basis on which he had exercised his powers.
If one reads the local authority answers to the Secretary of State when he first intimated that he proposed to use his powers, one can see—apart from the principle of the thing—that there were considerable differences of opinion between the Secretary of State and the local authorities over what was happening in a particular local authority and why expenditure was on one level rather than another. There were many detailed refutations by the local authorities of the Secretary of State's case, but not one of those arguments was answered by the Secretary of State either in the orders or in the speech that he made in the House.
The right hon. Gentleman has untrammelled powers and he exercised them in a more than capricious, if not malicious, way in 1981. Amendment No. 3 would reduce to some extent the sweeping nature of the right hon. Gentleman's powers.
Amendment No. 4 would insert a requirement to have some regard to the quality of the local services. That is a matter which the Secretary of State continually omits to take into consideration, and which he has omitted all the time to take into consideration in his dealings with local authorities over the past two or three years. We are not talking about some and financial argument which has no effect on the way that ordinary people live. We are dealing with the quality of important, essential services such as education and housing.
In the exercise of the Secretary of State's powers in all the dictatorial legislation that is being put through by the right hon. Gentleman there is no mention of the quality or the level of services and the effect that his action might have on reducing the quality of those services. The Opposition feel strongly that the ultimate decision making in those matters should be at local level, instead of the powers being taken away and arrogated to the Secretary of State, who certainly does not know the local circumstances in the way that the duly elected local authorities do.
Amendment No. 5 would limit the Secretary of State's powers. Under the clause he will have a double power—a power both to reduce the RSG and to redetermine the rate. He can do one or the other, but he can also do both. It seems to me monstrous that with those new powers being taken in the clause all the existing powers will continue and from 1983 onwards the Secretary of State could both redetermine the rate and reduce the rate support grant.
That is a double use of power which I believe is intolerable. Amendment No. 5 would say "If you are to have those dictatorial powers, at least you should use only one and not be able to use them both simultaneously."
Those are the effects of the individual amendments.
I return to some of the more general arguments. The Secretary of State always justified the powers that he tock


under the previous legislation—and he is using the same argument for the new powers under this legislation—by saying that local authority expenditure was wildly out of control. It was said that a responsible Government and a responsible Secretary of State were doing the best that they could with Government expenditure, but local government expenditure was out of control.
The Government have a paranoia about local government expediture. According to The Scotsman, Councillor Proudfoot, Tory leader of the Perth and Kinross district council, said at a meeting with the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who was then Under-Secretary of State for Scotland:
I think central government has become paranoid as far as local government is concerned".
I am sorry that the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) is not present to hear the comments of the Conservative leader of his district council. I do not know where the hon. Gentleman is. He is probably invading the Falklands.
The Secretary of State told us in the RSG debate in February that in 1980–81 local government expenditure increased by 1·6 per cent. in real terms. The spending may not be at a level that the right hon. Gentleman finds acceptable, but it could hardly be said to be wildly out of control. In 1981–82 local government expenditure was planned to rise by only 0·2 per cent. in real terms.
There is no question of local authority expenditure being out of control. However, with increase of 1·6 per cent. in one year and 0·2 per cent. the next year, we have to ask why rates went up by 32 per cent. and 36 per cent. respectively during those years.
The Secretary of State tries to pretend that massive rate increases, about which we warned ratepayers on numerous occasions, were the result of local authority extravagance. The truth is that the rate increases have been largely due to inflation and the fact that the Government have cut the RSG in a number of ways, sometimes by cutting the percentage rate and sometimes by inserting phoney figures for inflation and so on.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) was told in a recent parliamentary reply that local authorities were budgeting for about £200 million above the Secretary of State's guidelines for 1982–83—about 8·3 per cent. over the guidelines. The ultimate figures may be slightly different, and I understand that, in accordance with what has happened in earlier years, the budgets are likely to be nearer the guidelines.
However, the guidelines are unrealistic. The figures for local government expenditure look so high only because the guidelines are unrealistic. As we and CoSLA pointed out earlier this year, even if local authorities collectively had introduced standstill budgets for 1982–83, compared with 1981–82, taking into account the Government's assumptions of 4 per cent. inflation in wages and salaries and 9 per cent. inflation for other costs, those standstill budgets would be £152 million above the RSG guidelines and settlement.
At that time CoSLA calculated that to reduce its budget to what the Secretary of State wanted in the rate support grant, using his assumptions about inflation, there would have to be a 6·3 per cent. reduction in local government expenditure in real terms in 1982–83. As we said during the rate support grant debate, that will not happen. There

is no chance of its happening. The figures have never been denied. If the Secretary of State disputes them, he can deny their correctness later. We said that there was not the slightest hope that the local authority budgets for 1982–83 would come anywhere near the figures that the Secretary of State had assumed for rate support grant purposes.
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While preparing their budgets, local authorities often do not use the Secretary of State's assumptions about inflation. It is just as well that they have not done so. We already know that they have been falsified by events. There is a 4 per cent. rise in rate support grant for salary increases. Manual workers have already been awarded a wage increase of 6·9 per cent. Teachers are to have a salary increase. Of course, the Secretary of State can stop that if he is really serious. We shall see what he does. A 6 per cent. increase has been recommended. If the Secretary of State's rate support grant settlement allows for only 4 per cent. and manual workers have been awarded a 6·9 per cent. increase and teachers a 6 per cent. increase, the additional burden falls exclusively on the rates.
The Secretary of State normally says that the cost can be offset by reducing the number of people employed. Perhaps he will say specifically either that he will not allow the teacher's salary increase to go through or that he will tell local authorities to reduce their teaching staff. That would be monstrous. I do not believe that he will do that. It would be extremely foolish. But if he does not want local authorities to spend money he should tell them to trim their teaching staff accordingly. He does not do that. He and his sidekick the hon. Member for Edinburgh, North (Mr. Fletcher) who is not present, constantly boast about the wonderful teacher-pupil ratios. They fail to point out that we have them only because local authorities sensibly ignore what he tells them to do about education expenditure.
When one takes into account realistic inflation figures, one finds that in 1982–83 local authorities will spend no more in real terms than they spent 1981–82. As I have said, in 1981–82, according to the Secretary of State's own figures, the real increase in expenditure by local authorities was only 0·2 per cent.
All the talk about local government being extravagant and expenditure being out of control is absolute nonsense. In fact, it is more than nonsense. It is a deliberate attempt to put the blame of the Government's failure on to the shoulders of local authorities and to confuse electors into believing that they are suffering because of the inadequacies of local government. Unfortunately, there are hundreds of thousands, indeed millions, of people in Scotland who are suffering. They are suffering from the inadequacies of the Secretary of State and the Government, not from the inadequacies of local authorities.
The paranoia about local authorities goes on. There is talk of a crisis in local government relationships with central Government. There is much talk about alternatives to the rates. We heard from the Under-Secretary of State that the Government have got no further on that matter. He seemed to think that that was all right because before the 1974 general election they only promised to abolish domestic rates. Apparently it is acceptable to say eight years later that they have made no progress. It is a curious argument.
Moreover, the Bill is a further attack on local democracy. Let us consider how the previous powers have been operated by the Secretary of State and what success he has had after all his great—in my view, completely misguided—efforts to make local authorities obey his dictates and act as poodles of the Secretary of State rather than as independent authorities making their own decisions.
In 1981–82, 59 out of the 65 local authorities were above the guidelines by 8·93 per cent. There was a marginal improvement in 1982–83. As we predicted—there is no difficulty in making these predictions as the results are obvious—56 out of 65 local authorities were above the guidelines, so there is not a great deal of difference there.
The Secretary of State has singled out two authorities—Lothian region and Stirling district. I am extremely interested in what will happen in Lothian region over the next few weeks. I see that the Conservative administration there is asking for a meeting with the Secretary of State. I do not know why a meeting should be needed. If the guidelines are perfectly fair and reasonable and the previous Lothian council was rating for £66 million in excess of the guidelines, I do not understand why the new Conservative administration is not aiming not just for £45 million but for £66 million savings. If the guidelines are right, it should be able to achieve that saving.
Even if the Conservative councillors in Lothian achieved a reduction of £45 million, however, according to the guidelines the overspending would be reduced from 22·6 per cent. to 7·3 per cent. Moreover, I do not think that even that saving will be achieved. Now that the Conservatives are trying to run the council rather than just criticising from the sidelines, they will have found that the Labour administration was absolutely right about the effect on services and so on if such massive savings were made. Nevertheless, even if it made £45 million savings, Lothian region would still be 7·3 per cent. above the guidelines whereas the Strathclyde Labour administration is only 4·9 per cent. above the guidelines. Perhaps the Secretary of State will explain how justice operates in that odd circumstance. When the matter was raised at Question Time recently, he said that the penalties had nothing to do with the guidelines. In that case, what are the penalties to do with? And what do the guidelines mean? Will he explain the anomalies in those figures?
I hope that the Secretary of State will not make the claim that he made in Perth at the weekend. We all understand the atmosphere there, of course.

Mr. Dennis Canavan: It was like a zoo.

Mr. Millan: Yes, we all understand what it was like. The Secretary of State—or perhaps it was the hon. Member for Edinburgh, South (Mr. Ancram), the non-Minister who is with us tonight—was explaining how the Tories won the election in Scotland on 6 May. If they keep winning elections like that, we shall be delighted. In the country as a whole, the percentage vote for Labour rose from a margin of 9 per cent. in our favour in 1978 to 12 per cent. in 1982. Even in Lothian region, the Labour share of the vote was 2 per cent. higher than the Tory share—29 per cent. for the Tories and 31 per cent. for Labour. That is no great victory. Nevertheless, the Tories

have taken the administration in Lothian. We shall see what they will do with the reduction that the Secretary of State has asked for. I shall be surprised if they can make a reduction anything like that which the Secretary of State has asked for.

Mr. Craigen: My hon. Friend referred to the Secretary of State's address to the Tory conference at Perth. I saw a snippet of that on the television and the message seemed to be that we should not be grumbling because the re t of the United Kingdom is doing even worse than Scotland.

Mr. Millan: That is an uplifting message. It is so uplifting that I avoid watching the Secretary of State on television, in case I am carried away with enthusiasm over all the benefits that the Government are giving Scotland. The fact is, as we know, that the situation in Scotland, in terms of the economy, employment and the rest is disastrous. I find it extremely offensive, even in the ambience of a Tory Party conference, to have the Secretary of State boasting about what he has done for Scotland when there are 330,000 Scottish people unemployed at the present time.
As I have said, CoSLA has condemned these further interferences in local authority power and we have condemned them as well. We have said, and I repeat, that what has happened in relation to Lothian, Stirling and the rest, cannot even be justified on the basis of the Secretary of State's guidelines. I put on the record once again that if Lothian is 22 per cent. above the guidelines, Orkney is 25 per cent. The right hon. Member for Orkney and Shetland (Mr. Grimond) complained about the situation. He has conveniently disappeared. Orkney council is 25·8 per cent. above the guidelines. The Scottish record is held by Shetland. It is 79·5 per cent. above the guidelines. I shall be interested to know when the penalties will be imposed on Orkney and Shetland. I wager that there will be no penalties on Orkney and Shetland. The Secretary of State would not dare. Why not? I do not want penalties on Orkney and Shetland, or on anyone, but if they are to be justified on the basis of the guidelines, it is scandalous fiat authorities—one could quote many—that are substantially above the guidelines are apparently escaping unscathed. At the moment, Tory authorities are escaping unscathed whereas there is a continued vendetta against the Lothian region. The figures do not justify it.
We are objecting not just to the exercise of the powers but to the possession of the powers. We have been against them from the beginning. We have already committed ourselves to repealing the powers that the Secretary of State took in the 1981 Act. If clause 1 goes through, we shall repeal that as well. This is another scandalous accretion to the Secretary of State's powers and we are absolutely opposed to it. That is why we tabled the amendments.

Mr. George Foulkes: I am pleased to participate in the debate and to speak after my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan).
I had the great privilege to be a local authority councillor from 1970 until I entered the House in 1979. It grieves me to see some of my former colleagues in local government, who have striven valiantly over the years, many of them working in a voluntary capacity without pay and with a great sense of duty and mission, being beaten


down, undermined and thrashed by the Secretary of State. They are still there, working hard and striving to provide decent services.

The Secretary of State for Scotland (Mr. George Younger): Surely the hon. Gentleman is not right in that respect. They are not being beaten down; they are being beaten. Was it not the electorate who beat them?

Mr. Foulkes: I think that the right hon. Member lives in the Central region. He certainly does not live in Ayr, his own constituency. I can assure him that if he comes to Strathclyde occasionally he will see that the huge majority that the Labour group in Strathclyde had has now been increased very substantially. He will also find that to be so if he looks in Fife and in Central. With the assistance of the Tory press, he went out of his way to attack and to vilify the Lothian region, yet the Labour Party still managed to get as many seats as the Conservatives. The Labour Party did very creditably in the circumstances. [Interruption.] I maintain that that is so, whatever guffawing we may have from the Tory Benches.
The situation grieves me greatly. There are many people who have gone into local government to do a job and to do it well, but they have been constantly undermined by the Secretary of State, who knows nothing about local government. I do not think that he has had the opportunity of serving in local government. I do not think that he understands it. There are many other Conservative Members who do not understand how local government works.
When I say that people have gone into local government to do a job of work, I am not referring only to Labour representatives. Many of the Conservatives, the independents and others have gone into local government to help build up services. That is why, as my right hon. Friend the Member for Craigton has said, many of the Conservative representatives in local government are greatly disturbed by the way in which their position has been undermined.
This is an important debate, and before I continue my attack on the Secretary of State and his tribe, I want to propose a toast to absent friends. None of the members of the middle party—the odds and sods—was prepared to serve on the Committee. I have noticed that in this debate, apart from an odd Liberal—a very odd Liberal—from time to time, none of the Social Democrats has been present.
The right hon. Member for Glasgow, Hillhead (Mr. Jenkins) was supposed, at the time of the by-election, to be the great saviour of Scotland. I award him the title of damp squib of the decade. Not only has he failed to make any impression on national or United Kingdom issues; we have seen no evidence of him in Scottish debates speaking for the people of Glasgow or the people of Scotland—except on one issue. In the Scottish Grand Committee he made a fantastic, wonderful speech about taxis. That is the only contribution that we have had from the right hon. Member for Hillhead—the man who sets himself up and who was set up by the media as the great saviour of Scotland. He was to be the symbol of the new renaissance in Scotland. Before the month was out, we were all to be drinking claret till the cows came home. What have we seen from him? Nothing. He is the damp squib of the decade.
My right hon. Friend was right in what he said about Lothian. We shall watch very carefully, over the next few weeks, the actions of Convenor Meek and his colleagues. It will be very interesting to see what happens. I know Brian Meek very well. He has already asked for a meeting with the Secretary of State. My right hon. Friend asked "Why does he need a meeting? Why does he not do his master's bidding? Why does he not do what the Secretary of State is telling him?" We know why Brian Meek is not doing it. Brian Meek knows as well as everyone else that the guidelines are unrealistic, arbitrary and meaningless. He knows that as well as the hon. Member for Edinburgh, South (Mr. Ancram), who is sitting there on the Tory Benches grinning. Brian Meek knows that these are arbitrary guidelines. That is why he needs a meeting.
Brian Meek needs a meeting in order to say to the Secretary of State "You asked us what we were doing. We have to tell you truthfully"—probably the meeting will be in private—"that what the Labour administration said to you was pretty well right—that in order to achieve your guidelines we shall have to have major reductions in services, we shall have to increase fares in Lothian regional transport substantially, and we shall have to have redundancies. They will not be just voluntary redundancies. If you press us to follow your guidelines there will have to be forced sackings as well."

Mr. Ancram: The hon. Gentleman speaks of enforced redundancies. Can he say, when £30 million was removed from the Lothian budget last year in November within a six month period, how many redundancies, enforced or voluntary, were caused? I think that he will find that there were none.

Mr. Foulkes: If the hon. Member examines the facts he will find that there were redundancies and cuts in the number of services.

Mr. Gavin Strang: As my hon. Friend knows, the cuts were made last year by allocating only £6 million in respect of staff cuts. It was therefore possible to meet the figure by natural wastage of over 2,000 jobs. That was only because Lothian confined its cut on staff to £6 million. There is no chance of that this year.

Mr. Foulkes: I am grateful to my hon. Friend. I want to go on to deal with that £30 million cut. I shall do so not by quoting myself, or by making statements which Conservatives might believe were politically motivitated, even should they give me the benefit of the doubt. I shall quote from an old sparring partner of mine, a chap with whom I have disagreed on many occasions. He used to sit across the table from me in the discussions that we had in the Lothian regional council when I was there, about teachers, salaries, conditions of service and all the questions of education.
The person concerned is Mr. Henry Philip, the well-respected head teacher of Liberton high school in the constituency of the hon. Member for Edinburgh, South. The hon. Member will know how well-respected Mr. Philip is. He will know that Mr. Philip is the chairman of the Lothian Educational Institute of Scotland regional executive and has been active on the national EIS as well. He talks about the Lothian cuts in a letter that he wrote to The Scotsman on 4 May. He says:
Because there has been no replacement of staff … headteachers have been unable to guarantee class continuity of teaching … children have been deprived of certain subjects".


One of the great deprivations has been in language teaching. There are now serious inadequacies in language teaching in most of our local authority schools. Most of the minority languages are almost extinct because of the cuts.
The letter goes on to say:
Children have had to learn without textbooks and teachers have had to scrounge old computer paper when stocks and jotters ran out. Windows have not been replaced, damaged roofs and ceilings have gone unrepaired, heating has been substandard, rooms have gone uncleaned and there has been no routine maintenance which, as all householders know, will result sooner or later in a massive bill for serious structural defects".
That is what is happening with the cuts that have already been imposed, before we get to the cuts that will be imposed this year. There will be great damage to the fabric of our educational establishments.
Mr. Philip goes on to give some of the facts and figures that have already been given about the inadequacy of the allowance for inflation, and to criticise what the Government have done. This is outside criticism, not from the Labour Party but from somebody desperately concerned about the educational service. Mr. Philip finishes by saying:
Sadly, I have come to the conclusion that Mr. Younger thinks that the education of ordinary children is not important and, because the excellent educational provision in Lothian has shown up the serious inadequancies in other regions which have tried to follow his dictate, he has decided to cut Lothian down to their level.
I would hope that all those who realise that the future of this country depends on the education of the young would not let him get away with it.
I hope that when we have the next opportunity to ensure that the Secretary of State does not get away with it, Henry Philip and all the other teachers, all the social workers, the dustmen and the old people who rely on the services that Lothian and other regions provide will not let him get away with it, and will ensure that the Secretary of State and his tribe will not return.
The Secretary of State and his tribe look after their own. While these cuts are taking place, because of the dictate of the Secretary of State and the Conservative Government, affecting ordinary children in local authority schools, his children and their children are well looked after. Their children in the private schools are getting more and more money. Their children are getting £800,000 extra in the assisted places scheme. Their children are getting £2 million in rate relief assistance. Their children are well looked after in their schools. No cuts are being made in the private schools because of the extra assistance given by the Government.
I find it appalling to see the penny pinching that is going on. We are talking about only hundreds of millions of pounds. In normal parlance, in the budgets of individuals, that is a great deal of money, but it is not a great deal of money in national budgets. After all, it seems to be perfectly possible to find out of thin air, not hundreds of millions of pounds, but thousands of millions of pounds to send the infernal task force to the South Atlantic in pursuit of some way to mend the hurt pride of the right hon. Lady the Prime Minister. That, basically, is what it is about. Even in the ordinary Budget, the latest predictions for the public sector borrowing requirement show that it will be £2 billion below the estimate that the Government gave. Why then does the Secretary of State continue to squeeze these vital services in the local authorities? On that basis, there is no justification for it.
I want to deal with a local authority that is a little nearer my home and my constituency, and a little nearer the constituency of the Secretary of State. Last year, the Secretary of State and his advisers made a bloomer. They put Cumnock and Doon Valley district council on the hit list. When they went into the matter in detail, instead of just looking at the league table, they found that they were wrong, and discovered that Cumnock and Doon Valley was not an overspending authority. Cumnock and Doon Valley gave the Secretary of State a detailed answer. In the end, the Secretary of State had to admit that he was wrong, and he withdrew the authority from the hit list.
On the basis of the guidelines published the other day in The Scotsman, there appears to be a prima facie case for Cumnock and Doon Valley to be on the hit list again. The Secretary of State would be equally wrong, equally misguided and equally stupid if he put it on the list, and at the end of the day he would again have to retract. He misunderstands the way in which the budget is drawn up by Cumnock and Doon Valley. Its budget is drawn up slightly differently from the method adopted by Lothian region and in most other authorities. The apparent figures of excess over guidelines, given in the article in The Scotsman, is therefore misleading. If the Secretary of State examines the accounts and projected figures of Cumnock and Doon Valley, as I have done, he will find that they are far from being over the guidelines. The authority is extremely prudent and reasonable. In fact, it seems almost too reasonable and prudent in its budget for the current year. So I hope that the Secretary of State will proceed carefully, and not act just on the basis of raw figures of excess over guidelines, as shown in the table.
The Secretary of State continually tells us, on some kind of spurious basis, that he has the support of the public for this vicious attack on local authorities, and that somehow he has a mandate for it, because at the last election the Conservative Government were elected on this as part of their platform. Apart from the important fact that the Conservative Government obtained no mandate in Scotland—the hon. Member for Dundee, East (Mr. Wilson) wanted me to make this point, but I make it because I want to do so—if we had had the Scottish Assembly that we should have had, the Government would not have had the opportunity to introduce this Bill. There would be none of this ridiculous unauthorised pushing of local authorities in Scotland.
We must look at what might be considered a fairly reasonable analysis of whether the Government will have any support at a general election, or even at local elections. We know that there are many factors that decided the way people vote. I am sure that many people did not vote in the general election or, I fear, in the recent local elections, on the effects of this clause or on the Government's general policy towards local authorities.
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The Scotsman did us all a favour in producing the MORI poll on Tuesday 4 May. The poll showed that the Government does not have the support of the people for their policy of bashing local authorities. The article states:
It does not seem either that the Government have won overwhelming support for themselves in their battle to control the spending of local councils. Over Scotland as a whole, 48 per cent. of voters disapprove of the Government's actions, against 39 per cent. who approve.
The article continues that the poll did not find approval even in the Lothian region, where the issue is perhaps


heightened more than anywhere else. We were talking earlier about raising money for the funding of local government. I therefore draw to the Under-Secretary of State's attention the next extract from the article. It states:
There is, however, a persistently high degree of popular loyalty to the concept of local government—82 per cent. of Scots say they prefer local services to be controlled by elected local council rather than by central government.
The vast majority of people believe in local government and want decisions regarding their services to be made locally. That is the message that comes strongly from the poll, and on every other occasion. Since that is the message, we should accept my right hon. Friend's amendments and defeat the Government who are constantly berating, undermining, and attacking the local authorities and councillors who are elected to uphold services and local democracy and whom the Opposition support.

Mr. Ancram: I always hate to question The Scotsman, or, indeed, opinion polls, but I should have thought that the hon. Member for South Ayrshire (Mr. Foulkes) might have decided that the most conclusive opinion given in Lothian region over the past three months was not that of the opinion polls but the result of the elections. It is amazing to hear his claim of victory. There is almost a cry of "We wuz robbed" from the Opposition. One fact was absolutely clear from the result in Lothian. The total vote against Labour in that region shows that Labour was comprehensively rejected. The electors of Lothian made certain that the type of confrontation that we have seen in local government, deliberately motivated by a Left-wing
band of councillors, was conclusively ended.

Mr. Home Robertson: Will the hon. Gentleman confirm that the Labour Party polled 2 per cent. more votes than the Conservative Party in the Lothian region?

Mr. Ancram: This is a semantic argument. I was elected to the House in February 1974 in the seat presently held by the hon. Gentleman. I was faced by a Labour Government when the Conservative vote at that election was 1 million more than the Labour vote. We can argue until the cows come home, but the simple conclusion drawn by the electorate at Lothian—I shall not be drawn into the argument for electoral reform by the minor parties who have returned to the fray—is that they have had enough of that type of confrontation and they voted accordingly.
I had not intended to speak, because I thought that I had already spoken often enough on this subject. However, I was provoked into speaking by some of the remarks made by the hon. Member for South Ayrshire. I was provoked not by his totally unworthy remark about the Prime Minister's motives in sending the task force, but by other remarks that he knows—as an ex-Lothian regional councillor—are so selective as to be unworthy of rational discussion.
The hon. Member for South Ayrshire said that in addition to last year's cuts, more cuts would be imposed this year, which would make the position worse. He knows as well as I do that the cuts are made within the annual budget and that the cuts made last year were made for that year. They are not additional to the cuts to be made this year. If £30 million was taken off last year, and if £30 million is taken off again this year, on an equivalent

budget—which it is not, because there was a degree of increase in it—the expenditure would be the same. The cut is not additional and will not create more difficulties than last year.
The hon. Member for South Ayrshire cited a headmaster in my constituency, Mr. Philip. I know him well and I have had many discussions with him about educational cuts. The hon. Gentleman quoted a letter that Mr. Philip had written to The Scotsman, which was another interesting bit of special pleading. I do not know why the hon. Gentleman decided to set up Mr. Philip as someone who was, if anything, across the table from him. To suggest that Mr. Philip, as the chairman of the Lothian Educational Institute of Scotland, is somehow apolitical, is to suggest that Mr. John Pollock, the general secretary of the EIS, is a Conservative. I am sure that the hon. Gentleman would not suggest that.
In that letter, Mr. Philip was selective because, although he spoke about the effects of the reductions made last year on educational provision within his school, he did not mention educational administration. He failed to mention that Lothian region still, amazingly, has more people administering education than teaching in the classrooms.

Mr. Foulkes: That is not true. The EIS is not affiliated to the Labour Party. Many people, at all levels of its ranks, are members of parties other than the Labour Party. Regrettably, far too many are members of that funny Social Democrat lot. The hon. Gentleman keeps repeating an error. I have corrected him before and I can only assume that he is repeating it mischievously. He claims that those in administration outnumber those teaching. That includes cleaning ladies, dinner ladies, technicians, janitors and so on. They are not administering education, but are providing essential services in our schools. They are fed up with being denigrated by the hon. Gentleman.

Mr. Ancram: I am not surprised that the hon. Gentleman should take that line. After all, he was the architect of that system within Lothian and it is he—and not the regional councillors, of whom he spoke so highly, and who were recently defeated—who bears responsibility for the situation that existed within the education authority in Lothian region. He bears as much responsibility as anyone else for the high rates imposed on Lothian region in the past four years, even if he was not there. It falls ill from his mouth to make such comments. He knows that anyone who has had the responsibility that he has had should be careful about how they later apportion responsibility for the things that go wrong. Therefore, I hope that we shall hear no more from the hon. Gentleman on that matter.

Mr. Maxton: rose——

Mr. Ancram: I shall not give way. I shall conclude on a more serious point. The right hon. Member for Glasgow, Craigton (Mr. Millan) described the legislation as dictatorial. It is not mandatory, but enabling. If the Secretary of State wishes to impose an order under the clause, he must return to the House to seek its approval. That will not happen automatically and now that the one highly irresponsible authority in Scotland has changed, the Secretary of State is less likely to have to return to the House. I am thankful about that because I have never enjoyed the confrontation between local and national government during the past three years.
It is important for us to realise that the Secretary of State, quite rightly, is asking for a power to be made available—for which he must receive the consent of the House of Commons—so that the electors of a local authority area need never again suffer rate rise after rate rise as the people of Lothian have suffered during the past four years.
I hope that one thing that will happen as a result of the local elections last week is that, during the next four years, local government in Scotland can once again enjoy the general co-operation with national Governments that it enjoyed previously with Governments of both parties and as a majority of local authorities have enjoyed cooperation with the Secretary of State during the past three years. I hope that it will remove the confrontation and allow local authorities to know that if they go too far, deliberately seek confrontation or put party politics above their electors, this Secretary of State and this Government will not stand by idly and see the electors suffer. For that reason, I welcome this legislation and I hope that the House rejects the amendment.

Mr. Jim Craigen: My hon. Friend the Member for South Ayrshire (Mr. Foulkes) pointed out earlier that the Secretary of State for Scotland has never served on a local authority. The same is true of the hon. Member for Edinburgh, South (Mr. Ancram). His idea of a public school is somewhat different from mine. I went to a State school and I suspect that, when the hon. Gentleman talks about public education, he is referring to the private sector.
I wish to return to the substance of the amendments moved by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). If the Government are so keen to do good for the ratepayers as they keep telling us, it would be far better to sustain a higher measure of central Government support for local authorities. For example, if we take Glasgow district, had the rate support grant remained at its 1979–80 level of 41 per cent. in 1982–83 the ratepayer would be 13p better off. That is the measure of the shift in the allocation that is given by central Government to local authorities. In Glasgow during that period there has been a reduction in central Government support from 41 per cent. to 33 per cent., which means that the ratepayers must pay a larger proportion of the burden of sustaining local authority services.
The Secretary of State appears to wish to have a double-edged razor. With one cut, he wishes to lower the rate support grant, as many of his predecessors wished. But he now wishes to have a second blade, so that he can reduce the rate that is levied by the local authority. That is a significant intrusion into the powers of local authorities. Had the Government really been keen to improve the position of ratepayers, they would have produced a much more positive Green Paper before the new year. As it is, the consultative document offers very little prospect of improving the position for industrial firms and commercial organisations and little prospect of assisting domestic ratepayers.
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When I examined a previous Conservative Government Green Paper, published in 1971, it struck me that one significant difference was that there was less emphasis on the prospect of agricultural rerating because, of course, the Government do not want to upset the farmers. If the Government persist in seeking rigidly to control local

authorities they will get into as big a mess as they have with their national housekeeping. The Government provide little cause for believing that their ability to handle expenditure and services at the local level will be any better.
This is information technology year and we spent most of the afternoon discussing new technologies. It seems that the Secretary of State wants the newly elected regional councillors and the existing district councillors to sit at the computer terminals and more or less approve all the printouts from New St. Andrew;s House. This is his idea of how local government in Scotland should operate. He wants, more or less, to put the words into the mouths of councillors.
One can see all the usual moves toward quick-spend projects as the Government become a little more nervous about unemployment increasing. In the meantime, we have to go through this Gilbertian phase when the Secretary of State assumes the role of the Lord High Commissioner. He has a little list and no doubt——

Mr. Dewar: Lord High Executioner.

Mr. Craigen: Perhaps the events this week at the General Assembly caused me to make that inadvertent slip. There might come a time when the Secretary of State becomes the Lord High Commissioner—we cannot tell.

Mr. Ancram: Moderator.

Mr. Craigen: At any rate, the Secretary of State is not thinking of ecumenical matters now. He is more concerned with clobbering the local authorities. I suggest that when the Manpower Services Commission has just published its youth group report and when the Government are seriously considering how they will cope with the employment training of the 16 to 17-year-old age group the way in which the Government are examining manpower is developing into a nonsense. On the one hand, they are telling local authorities that they should reduce the level of their manpower and decrease the number of permanent jobs—either through natural wastage or, as is likely;to happen, through the "wedge" of redundancy. On the other hand, they are saying that we should spend more money on special programmes to sustain projects that would often rank as lesser priorities were it left to the local authorities to draw up the priorities. At the end of the day, the jobs created are only temporary jobs; they are not permanent.
There exists an inconsistency in the Government s manpower policy and it is one that the Secretary of State, wearing his other hat as the Minister responsible for employment in Scotland, should seriously consider. We cannot go on destroying permanent jobs to create the illusion of employment through impermanent jobs on special programmes.
When talking of guidelines we give the impression that we are discussing scientific measurements, understood by central Government, local authority officials and elected councillors. Nothing could be further from the truth. Apart from the creation of the new client groups under the new formula for rate support grant, a new language is developing. I understand from people who are informed in these matters that "smoothing", "stability" and "specific cost variations" are involved. That is the new terminology introduced so that the Government achieve their required result. There can be no statistical error by which a local


authority is able to scoop out of the pool. According to the new terminology the Government must be able to alter the figures so that they suit them.
We spend much time bandying words about local authorities. We tell them what they should do but Scotland has been relatively well served over the generations by its local government system. In Scotland local government matters more than it does south of the border simply because of the range of services that local government is obliged to provide.
I hope that the Government will address themselves more to a reform of the way that resources are allocated to local authorities. Too often we consider only the structure of change in local government. The Labour Government were mistaken in simply asking the Wheatley commission to examine the structure of local government, thinking that that could be compartmentalised without taking into account the equally important aspect of ensuring that the resources are available to local authorities.
Local authorities will be able to master the services that they provide and operate them more effectively and in a more stable way only if the Government ensure that they are sufficiently funded so that they can raise the bulk of the cash themselves instead of relying on Government arbitrarily determining each year the amount of rate support grant and the way that it is funded. The Government promise a reform of local government in the foreseeable future. They should, therefore, withdraw clause 1 in the meantime.

Mr. Maxton: I am grateful to my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) for mentioning the link between the cuts imposed on local government by the Secretary of State and jobs. It makes a farce of the Government's exercise in local government expenditure. In real terms local government expenditure is not wildly out of control, but, increasingly, Government expenditure is wildly out of control. One of the reasons is rising unemployment. Each time that the Government cut local government services, despite what the hon. Member for Edinburgh, South (Mr. Ancram) said, further unemployment is created, even if it is by natural wastage or voluntary redundancy. The Conservatives have consistently failed to recognise that every time a person leaves a job, and the job disappears, someone in the pipeline does not get that job. It means that someone is unemployed. It may not be the person who has lost the job, but someone down the line who has lost a job as a result of natural wastage.
The Government are cutting essential services in local government. Those who operated those services are being declared redundant or are leaving and are not being replaced. The Government are transferring that expenditure into the national purse for the payment of unemployment and social security benefit. The Government are not saving any money by cutting local government expenditure. They are transferring it to another part of the public purse.
The hon. Member for Edinburgh, South attacked my hon. Friend the Member for South Ayrshire (Mr. Foulkes). He thought that he was attacking my hon. Friend for what

he did as convenor of education in Lothian region. Most of my hon. Friends think that he did a remarkably good job.

Hon. Members: Hear, hear.

Mr. Foulkes: I did not hear my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) say "Hear, hear."

Mr. Maxton: My right hon. Friend the Member for Glasgow, Craigton (Mr. Millian) may, when he was Secretary of State, have had difficulty with my hon. Friend when he was convenor.
The hon. Member for Edinburgh, South used that attack on my hon. Friend to get out of answering the question that he had asked. When the hon Gentleman says that there are more people in administration in Lothian region than there are teachers, he includes in those figures large numbers of essential workers. If the hon. Gentleman was referring to middle management in industry, would he tell his voters who work in management in private industry that they are administrators and quite useless in the general running of industry? Of course he would not. The hon. Gentleman is using false figures to try to create a gain and to build and feed upon his paranoia about a Labour-controlled Lothian region.

Mr. Ancram: I assure the hon. Gentleman that I had no intention of attacking his hon. Friend. The day that that happens he will know about it. In view of what he says about the necessity to have more non-teaching staff than teaching staff in Lothian region, is he making strong representations to the Labour-controlled education authority in Strathclyde region, where the figures are very different?

Mr. Maxton: I am not. Different education authorities work in different ways. I have heard the same complaint made by the hon. Gentleman;s Conservative colleagues in Strathclyde region about the administration of education in Strathclyde. It does not stand up to close examination. One must have administration. One must have cleaners, janitors, school meals ladies and so on if an education system is to operate. Lothian region has one of the best—probably the best—teacher-pupil ratios in the whole of Scotland and probably in the whole of Britain.

Mr. Ancram: rose——

Mr. Maxton: It was the hon. Gentleman who complained about the lack of teachers in Lothian region, not I.
That is the sort of myth that is being perpetuated. It is paranoia. My right hon. Friend the Member for Craigton was right when he said that the Secretary of State was suffering from paranoia about the Lothian region to the extent that we had a remarkable Conservative Party political broadcast—I did not see it, but I have been told about it—on the eve of the local elections in Scotland on 6 May. I gather that the Secretary of State spent the first few minutes of his broadcast praising a Labour-controlled authority in Strathclyde region. He did that so that he could make his usual attack on Lothian region.
The party political broadcast was not about Conservative aims in local government or what they were trying to achieve. I gather that it was merely another paranoic attack upon Lothian region. It must be accepted that paranoia is a mental illness and that those who suffer from it should not hold high offices of State.

Mr. Foulkes: What about the Prime Minister?

Mr. Maxton: I agree with my hon. Friend. The right hon. Lady should not be holding a high office of State, especially when she finds it more exciting to talk about war than providing services for the British people, which is what she did at the Conservative Party conference at Perth. It is disgusting that anyone finds war more exciting than the welfare of the people. However, that is the impression that the right hon. Lady gave on Friday night. Some of us heard her while watching television and know exactly what she said.

Mr. Ancram: The hon. Gentleman should have heard the whole of my right hon. Friend's speech.

Mr. Maxton: Fortunately, I am not a member of the Conservative Party.

Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I think that the debate is running rather wider than the contents of clause 1. I think that we should return to the amendment.

Mr. Maxton: I was about to say, Mr. Deputy Speaker, that the clause constitutes another attack upon local democracy in Scotland. Throughout the three years that the Government have been in office there has been a continuous attack upon those who run local government in Scotland. Local councillors of all parties, including the very few Social Democrats in Scotland, all feel that the Government are attacking them and removing their powers. They have introduced a series of Bills to try to curb the power of local government.
It is clear that the Government's intention is to curb one region within Scotland. Now that the Secretary of State's party has gained control of Lothian region, following a small change as a result of the recent local elections, the right hon. Gentleman might start to withdraw some of the legislation that the Government have introduced. He may feel that he has achieved his ends.
Many of us feel that Lothian Conservatives will overspend. If that happens they, too, will face the risk of being penalised by the right hon. Gentleman by means of clause 1. They will find that they cannot cut expenditure to the extent that the right hon. Gentleman wishes. If they do not cut it to the same level as other regions, the right hon. Gentleman will find it extremely difficult—I hope that his hon. Friends will take this into account—to penalise any other district authority in Scotland.
Today The Scotsman has issued a list of the excess over guidelines spending of authorities. The Secretary of State issues the guidelines and the local authorities do not have much of a say. Which authorities will the right hon. Gentleman penalise? I have already referred to Stirling and Lothian. Presumably Lothian will come off the hit list following the change of control as a result of the local elections.
The Lothian region's excess over guidelines spending was 22·5 per cent. There are other district authorities—for example, Aberdeen, with an excess over guidelines spending of 22·1 per cent.—which run Lothian close. The spending of Skye and Lochalsh amounted to an excess of 21·6 per cent., which again was very close to the Lothian figure. Sutherland's expenditure amounted to an excess of 22·6 per cent., which was even higher than the excess of the Lothian region.
I note that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon), an SDP Member, has joined us. Surely the hon. Member for Caithness and Sutherland (Mr. Maclennan), who is also an SDP Member, should be here. It is clear that the Caithness and Sutherland district council might be on the right hon. Gentleman's next hit list of the local authorities that he is to penalise.
The right hon. Members for Glasgow, Hillhead (Mr. Jenkins) and for Greenock and Port Glasgow manage to pop in for a moment or two. They are not interested in local government in Scotland. They do not seem to care what happens. It is no wonder that the people of Scotland voted for so few of their colleagues in the local elections. It is apparent that they do not really care about local government. Aberdeen is one of the local authorities that it is suggested might be on the hit list. If one hits Aberdeen, why not Orkney and Shetland? The excuse given for Shetland in particular is that the oil related industries create problems. It has to spend over the guidelines to cope with the problem. That is true of Aberdeen also. It has problems of coping with the oil industry, housing and other services that it has to provide. Which one of those is now on the hit list? If the clause goes through, what rates will be decided by the Secretary of State?
I have heard many people—journalists and even some people in local government—say, "What a charming man the Secretary of State is. He always sits and listens to what we say. He smiles gently and quietly at us." He apparently occasionally gives them a drink or a cup of tea. There is a Shakespearean quotation that I think fits the Secretary of State to a T. It is that
one may smile, and smile, and be a villain".
That is the Secretary of State for Scotland in terms of local government. He is taking dictatorial powers. He is determining what local government shall be. It is no longer a matter of local democracy with the people of the areas deciding. It is down to him—a tinpot dictator of the worst order.

Mr. Strang: A number of hon. Members have addressed themselves to the position in Lothian in the light of the local government elections. I wish to comment on that, but I should like to preface what I say with the observation that I think that it is a sad debate in the sense that we are debating something important, the clauses that provide for the suppression of local government in Scotland. I choose those words with care. Since we had the Second Reading debate, there has been published a historic document in the context of Scotland's social development, "A time to listen—a time to speak out" by CoSLA. I have no doubt that it has been quoted frequently in Committee, but I should like to mention two sentences from it.
The Scottish Office is no longer prepared to undertake meaningful discussions with the Convention. In recent years, there has been a systematic devaluation of the role of consultations. These have now in many cases been reduced to pointless ritual.
That is a terrible indictment of any Government since it is a document that is representative of Scottish local government and is endorsed by representatives of the Tory Party as well as the Labour Party. It is time for the, Government and the Secretary of State to think carefully about the road that they are determined to tread. I say unequivocally that the Tory Party will live to regret what it has done with the legislation. I hope that we shall see


the early return of a Labour Government, because the Labour Party and my right hon. Friend the Leader of the Opposition have made it clear that they will repeal the legislation and restore democracy to local government.
I return to what has happened in Lothian. I suppose that the Secretary of State feels that his party has achieved a victory and that he deserves a share of the credit. As the Labour Party no longer controls the regional council the right hon. Gentleman's feeling may be justified.
However, we are only at the beginning. The conclusions to be drawn from the confrontation between the council and the Government will be assessed only after we have seen what happens between the Government and the new council which is controlled by the Conservatives and their allies.
There is no doubt that cuts will be made. I regret that the Labour Party no longer controls the council, but, given that councillors have no scope to take independent decision, it is as well that the cuts will be made by Conservatives rather than by Labour councillors. I assume that the council has complete freedom to decide where to make the cuts, that there is no change in that regard and that there will be no suggestions or guidance from the Secretary of State.
Much nonsense has been spoken about the regional council being unreasonably alarmist about the Secretary of State's cuts. That is not true. The Labour Party has had thrown at it the accusation that we claimed that thousands would be made redundant if the Secretary of State went ahead with his policies. In fact, no one has been made redundant and staff savings have been achieved by natural wastage.
When the council submitted its considered response, which was debated in the House, it was on the basis of the Secretary of State's initial proposal of £53 million of cuts. Secondly, the council's officials made the reasonable assumption that the cuts would be made pro rata across the board and that as staff costs represented 70 per cent. of total costs the staff would bear 70 per cent. of the cuts.
In the event, neither assumption applied. The £53 million was reduced to £30 million. I am glad that the Secretary of State agreed to that reduction, but it must be accepted that there is an enormous difference between the two figures and that the final £5 million or £10 million of cuts are the hardest to make. The second assumption was not fulfilled, because the council, to its credit, went to great lengths to avoid redundancies. I hope that the new council will do the same and that there will be no compulsory redundancies.
It is unfair to criticise the council in that regard. It had to make cuts and we are now paying the price for them. I hope that Conservative Members in Edinburgh are getting as many complaints as I receive from my constituents whose children are having their education dislocated because of the freeze on staffing in Lothian.
I put another point to the Secretary of State and I hope that he will answer it squarely. I assume that the considerations that led the Secretary of State to conclude that Lothian region should cut its expenditure by £45 million are not altered by the result of the election. I assume, therefore, that the magnitude of that cut has nothing to do with the means by which Lothian regional council chooses to make that cut. I assume also that the

size of the cut will not be altered in any way because the council now happens to be controlled by his Conservative allies, supported by the Liberals and the SDP.
It was quite wrong of the Secretary of State to intervene and make his announcement during the elections. Perhaps he felt that the Labour Party had a good chance of retaining control and that it was essential to get the matter on the record before the election. Perhaps he felt that he could influence the outcome. I am not sure that it did.
9.45 pm
We want two assurances from the Secretary of State—first, that Lothian regional council will be free to make the cuts in the way that it chooses; secondly, that the magnitude of the cuts will not be influenced by the political complexion of the council.
There will be a real reduction in the level of services in the region. Many of the electorate, some of whom voted for Conservative councillors, will resent and oppose that. There is no way that anything like £45 million can be cut from the Lothian regional council's budget without there being severe effects on both the staffing of the council and, above all, the level of services provided for the benefit of the people in the region.

Mr. Canavan: I was not fortunate—or unfortunate—enough to be selected for the Standing Committee that dealt with the Bill. If I had, I should have been tempted to table at least one amendment to change the title of the Bill to the Destruction of Local Government (Scotland) Bill. If the Bill is passed, it will be another nail in the coffin of local government in Scotland and another nail in the coffin of local democracy in Scotland.

Mr. Home Robertson: I intervene simply to say that I tabled an amendment in Committee on the lines that my hon. Friend suggested. It was that the short title of the Bill should be altered to the Abolition of Local Government (Scotland) Bill. Unfortunately, the Chairman did not select it.

Mr. Canavan: I am grateful to my hon. Friend for that information. It just goes to show how unfair so-called parliamentary democracy is. Whatever unfairnesses exist in this place and in the Committees of the House, they are as nothing compared with the unfairnesses and injustices that the Secretary of State is now trying to inflict on local government in Scotland. Nowhere is that more clearly seen than in clause 1, which we seek to delete.
Traditionally, central Government, either through the Secretary of State for Scotland or, south of the border, through the Secretary of State for the Environment has had powers to influence local government or even to intervene to some extent in local government decisions. That is not new. However, since the Tory Government came to power there has been an erosion of the freedom of duly elected councillors, representatives of the people, many of whom have a better mandate than the Secretary of State and his colleagues. They now find themselves being bulldozed and streamrollered so that, if the Secretary of State has his way, they will be reduced to mere puppets with himself as the central dictator.
At about this time last year, we were discussing the Local Government (Miscellaneous Provisions) (Scotland) Bill. We saw then what many Opposition Members described as a very dangerous precedent. Previously, Government, with parliamentary approval, had the right


to influence local government finance by determining not just the overall level of rate support grant but the distribution of rate support grant in consultation with the local authorities through CoSLA. Last year, however, an unfortunate precedent was created. The Secretary of State not only took extra powers to propose to Parliament at the beginning the amounts of rate support grant to be allocated both totally and to individual authorities but thereafter took extraordinary powers selectively to reduce the amount of rate support grant for local authorities that he decided were guilty of excessive spending.
We warned at that time that this might be the first phase in the Secretary of State's quest for additional powers. In other words, the Tories are adopting new tactics. Instead of clobbering the trade union movement all at once, they are bringing forward a series of anti-trade union measures. In the same way, instead of clobbering or indeed killing off local authorities with one blow, they are inflicting what could almost be described as death by slow torture. Last year we had the Local Government (Miscellaneous Provisions) (Scotland) Bill and now we have the Local Government and Planning (Scotland) Bill. If the Secretary of State manages to get this on to the statute book, no doubt he will try to come back next year with further measures to erode what little freedom remains to local authorities.
Fortunately, however, the Secretary of State is unlikely to have the chance to do that next year. It is to be hoped that a general election will take place before then, and no doubt my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) will then be Secretary of State for Scotland—that is, if I do not get the job myself. At any rate, there will be a Labour Secretary of State who will be able to undo much of the damage caused by this rotten legislation.
As my hon. Friend the Member for South Ayrshire (Mr. Foulkes) and others whose experience in local government in Scotland has been far greater than my own have said, many people who have given a lifetime of service to local government in Scotland are now absolutely sick to the teeth. Initially, they thought that they were elected to maintain and improve services, but they now find themselves in an almost hopeless position in which the Secretary of State is trying to turn them into puppets who will simply administer cuts in essential services rather than maintaining or improving them.
The ever-worsening effects of Government dictatorship is apparent in this legislation. Not content with the extraordinary powers that he took last year to interfere with the level of rate support grant, the Secretary of State, through clause 1 which we seek to delete, is now taking power virtually to determine the level of local authority rates. I challenge him to suggest a greater infringement of the power of local government.
What is the point of giving local government the power to raise revenue and to decide how that revenue is to be spent if the Secretary of State stands over it like a big brother saying "You cannot do this, you must do that. You must not spend your money on this, you must spend it on that. You must sell your houses, irrespective of the needs of the local community."? That kind of dictatorship, by means of legislation that forces councils to sell their houses or that interferes in local finance, makes it almost impossible in many instances for people in local government to continue to do the job that they were elected to do.
What is the point of having local authority elections? Soon there may be almost no point at all in having local government. In the elections held earlier this month it was interesting to see that many seats went uncontested. Is it any wonder, when the Secretary of State does not give people who serve in local government enough elbow room to fight for the people that they are elected to represent? Some good people might have been inclined to enter local government but, because of the discouragement of the Secretary of State, they now say that it is not worth the candle. They may decide to work hard behind the scenes and perhaps even to use extra-parliamentary means to get rid of the Tory Government.

Mr. Norman Hogg: Will my hon. Friend agree that the argument that local government democracy has little appeal to the Government has some validity if one looks at the election results? They clearly demonstrate that nobody votes for the Government, anyway.

Mr. Canavan: Certainly very few. Even in Lothian, which the Secretary of State hoped to win by an overall majority because of his cheap electioneering gimmick prior to the election, the Tory Party got only a minority of seats and a minority of the votes cast.
May I turn nearer home, to Stirling district council, which covers part of my constituency? The same day that the Secretary of State announced a cut of £45 million in the rate support grant for Lothian, he also announced a cut of £1·5 million in the rate support grant for the Stirling district. That comes over and above what happened last year when Lothian regional council was one of those singled out for special hatchet treatment by the Secretary of State. Stirling district council was also one of those singled out for special hatchet treatment. At that time the Secretary of State reduced the rate support grant to Stirling district council by £700,000.
I remember trying desperately to organise meetings to have some form of negotiation and consultation on the matter between the Secretary of State and the council representatives. My hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) joined me. However, despite the Secretary of State's local knowledge—he lives there, or at least he has one of his houses there—he refused to meet council representatives to discuss what he intended doing regarding the council's finance. Eventually, after much persuasion from my hon. Friend the Member for Stirling, Falkirk and Grangemouth and myself, we managed to arrange a meeting in Dover House with elected council representatives, at least one council official and the junior Minister. The junior Minister—the office boy—was at that time the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). He has since been sent to the Foreign Office where I believe he is in charge of Siberia, among other places. If he makes a close study of Siberia he might find that Scotland is becoming even worse than Siberia for local democracy. We have a Secretary of State who is assuming centralist dictatorial powers that even Stalin and the Stalinists would envy. That is the kind of Secretary of State for Scotland that we have. He is trampling all over the wishes of the local people, whether in Stirling, Lothian, Dundee or wherever.
In Stirling—perhaps the Secretary of State would stop giggling about the misfortunes of the people in Stirling


district—the local authority accounts commission has, I understand, recently referred to the Court of Session the report of the local authority controller of audit to the effect that Stirling district council had, in his opinion, broken the law by refusing to hand back the £700,000 to the——

It being Ten o'clock the debate stood adjourned.

Ordered,
That, at this day's sitting, the Local Government and Planning (Scotland) Bill may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]

Question again proposed, That the amendment be made.

Mr. Canavan: I refer the Secretary of State to the relevant part of the controller's report, where he said:
In my opinion, a local authority owes a fiduciary (held or given in trust) duty to the ratepayers from whom it obtains the monies needed to carry out its statutory duties. The council was acting within its discretionary power in not returning money to the ratepayers by means of a lower rate but by its failure to take the steps open to it to avoid a reduction of rate support grant it was in breach of the fiduciary duty which it owes to the ratepayers and therefore acted unlawfully".
I do not know whether the particular case is sub judice as the referral has been made to the Court of Session, and I do not want the Secretary of State to comment on that aspect of the matter if he feels that it would be against the traditions of the House to do so. But if the refusal of the local authority to hand back the money to the ratepayers is illegal, what is the need for this clause? Who is it in St. Andrew's House that advises the Secretary of State that his powers under last year's legislation are so inadequate that he has to come forward with even more draconian measures, which he hopes to take under the terms of the clause?
My hon. Friend the Member for Edinburgh, East (Mr. Strang) and others have referred to the specific case of Lothian regional council, and I do not want to add a great deal about that, except that it is not just a question of a proposed reduction of £45 million. It is a question of a possible massive reduction in educational opportunities for children, in the standards of social work services for the elderly, the sick and the disabled, as well as the creation of more unemployment. That is what is at stake. It is not just a reduction in financial terms; it means job loss and the loss of essential services. The Secretary of State hoped to achieve victory in Lothian region, but the Tories, with the help of the SDP-Liberal Alliance, defectors and what have you, managed only by the skin of their teeth to cobble together some form of administration. I wonder what will happen now.
The chairman of the Tory Party in Scotland is the man who, every time a ministerial vacancy crops up, hopes that he will be the lucky one. Unfortunately for him, the Prime Minister wants him to do the kind of essential job that only a blue-blooded member of the Scottish aristocracy is fit to do. That job is to rally the party faithful in Scotland—the few that are left.
Almost since he was returned to this House at the last general election, the hon. Member for Edinburgh, South (Mr. Ancram) has campaigned to get rid of the Labour administration in Lothian region. I suppose that the hon. Member is patting himself on the back now that that man Brian Meek has the convenorship, with the help of the

defectors to the SDP and their collaborators in the Liberal Party, who managed to climb into bed with the Tory Party to form this administration.
Not so long ago I saw a film called "Life of Brian". There was an extract taken from the Sermon on the Mount which said:
Blessed are the meek: for they shall inherit the earth.
I wonder what kind of earth Brian Meek will inherit from his pal the Secretary of State. I know that all that the people in Lothian region will get are more and more savage cuts in the education of their children and in the essential services that are required for the elderly, the sick and the disabled. That is what the Secretary of State has to offer to the people of Lothian, and if he gets his way he will try to shove it down the throats of all the councils in Scotland. I hope that the councils that are still fortunate enough to have a Labour majority will stand up and fight against the Secretary of State.
It will not be just Lothian and Stirling which have been singled out. If the Secretary of State can clobber them, who will it be next? My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) referred to the list in The Scotsman today, and to the fact that Lothian and Stirling were by no means the worst in terms of percentage expenditure over the Secretary of State's guidelines.
How on earth does the Secretary of State arrive at these guidelines? As far as I know, he has never given any detailed mathematical calculation as to how he decides on the guideline for each local authority. I hope that he will be good enough to tell us how he decides that a certain local authority is £X or £Y million over his guidelines. On what criteria are the guidelines drawn up? Can he give us an example of the effect of the calculation of the guidelines on one authority? If it were not for the time, he could go through all the local authorities to tell us how this is done.
Looking through the list, it appears to me that there were only about half a dozen councils that did not breach the so-called guidelines. The two that were singled out—Lothian and Stirling—were by no means the worst. Orkney is 35 per cent. and Shetland 70·8 per cent. over the guidelines. Reference has been made to the special problems created by the oil development in Shetland. I remind the House that Shetland still has special powers to raise extra revenue from the oil development under the Zetland County Council Act 1974. Under the terms of that legislation the then Shetland county council, now the Shetland islands council, can raise revenue from the oil companies. I do not grudge Shetland that power, but has the Secretary of State taken that into account when assessing the guidelines? Oil development can be a bit of a help as well as a bit of a hindrance at times for local government.
Who else will be singled out? Aberdeen district council, is 22·1 per cent. over the guidelines. Skye and Lochalsh is not exactly Left-wing revolutionary territory. Perhaps the hon. Member for Inverness (Mr. Johnston) will give us the benefit of his views. His district council is 21·6 per cent. over the Secretary of State's guidelines. Sutherland district council is 22·6 per cent. over the guidelines, which is even worse than Lothian, if "worse" is the operative word. Cumnock and Doon Valley is 25 per cent. over the guidelines.

Mr. Foulkes: rose——

Mr. Maxton: rose——

Mr. Canavan: I shall give way to the hon. Member who represents Cumnock and Doon Valley.

Mr. Foulkes: I assure my hon. Friend that before he came into the Chamber I argued, I hope successfully, that the Secretary of State should not try to penalise Cumnock and Doon Valley again, as he did last year, because the guidelines were proved totally arbitrary and incorrect last year. I hope that the Secretary of State will bear that in mind in singling out authorities, many of whom challenge very vociferously the misleading figures that are put forward.

Mr. Canavan: I was in the Chamber and heard my hon. Friend say that. The Secretary of State made some terrible blunders last year, not just with Cumnock and Doon Valley but with many other Scottish local authorities. I hope that he bears all this in mind when he considers the strong representations which no doubt have been made, not only by Cumnock and Doon Valley district council, but by my hon. Friend the Member for South Ayrshire.

Mr. Maxton: My hon. Friend the Member for West Stirlingshire (Mr. Canavan) jumped to Cumnock and Doon Valley, but he missed out Bearsden and Milngavie, that other hotbed of Left-wing revolutionary Socialism, represented by my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg), which is 18 per cent. over the guidelines. That is a remarkable figure for a totally Tory-controlled council—in fact, I do not believe that it has a member of another party represented on it.

Mr. Canavan: I thank my hon. Friend the Member for Cathcart for drawing that fact to my attention. I was about to come to the authorities that lie partly in my constituency, and Bearsden and Milngavie district is one of them. There are fewer than six of my constituents in that district, but nevertheless they are very important people. There are also several hundred acres of land in my constituency that come into the Bearsden and Milngavie district. According to The Scotsman league table, that district is 18 per cent. over the Secretary of State's guidelines. As my hon. Friend the Member for Cathcart said, the political complexion of Bearsden and Milngavie district council, to my knowledge, has never been red revolutionary—perhaps extremist, but extremist to the right, not to the left of the political spectrum.
Then there is Strathkelvin district council, which also lies partly in my constituency. It is 18·8 per cent. over the Secretary of State's guidelines. Strathkelvin district council has the advantage of being Labour-controlled at this time, but I am sure that the people there would be horrified at the prospect of the Secretary of State singling them out for a savage reduction in the rate support grant that will affect many of their local government services.
I am therefore forced to the conclusion that this Government and this Bill are not motivated by reason, logic or accurate statistics. The motivation, if any, behind this legislation is sheer doctrinaire prejudice on the part of the Secretary of State and the Tory Party in Scotland. They claim that one of the greatest evils in public life today is over spending. By that, they mean too much public expenditure. They accuse local authorities, particularly Labour-controlled local authorities, of being almost the devil in disguise when it comes to overspending.
I do not want to make a party political point here, because it is more a matter of central Government vis-à-vis

local government. Historically, central Government have been far more guilty of failing to keep within their target, their expenditure guidelines. They are far more guilty. if guilty is the right word, than local government.
I hope that the Secretary of State will at least admit that that is the truth. It will be an even bigger truth when we receive the bill for the armada that we have sent to the South Atlantic. That bill is increasing daily and the Government will have to meet billions of pounds of extra expenditure. That money will have to come from somewhere. The Government will, rightly, be criticised for overspending in that respect. Let the Government not point their finger at local authorities who are seeking to preserve far more essential services affecting people in their areas.
10.15 pm
The Secretary of State and other Ministers continually harp on about rate increases destroying jobs and say that the burden of rates is crippling industry, particularly manufacturing industry, to such an extent that it is leaving higher rated areas for the lower rated areas, or disappearing from the industrial scene altogether, thereby leading to a significant reduction in jobs. That is a myth that I shall expose. In a question for written answer my hon. Friend the Member for Blackburn (Mr. Straw) asked the Secretary of State for the Environment
if he will publish in the Official Report a table giving the best estimate of rate payments by manufacturing industry, in £s million and as a proportion of manufacturing costs, excluding rates and taxes, for each year from 1978 to date."—[Official Report, 23 April 1982; Vol. 22, c. 163.]
The Under-Secretary could give only the figures to 1979. He said that the rates paid by manufacturing industry in 1979 totalled £925 million. Expressed as a percentage of manufacturing costs, the figure is 0·66 per cent. Less than 1 per cent. of the manufacturing costs of industry are taken up by rates.
How can the Secretary of State, or anyone else, argue that rate increases are a huge burden on manufacturing industry, that they are causing the de-industrialisation of Scotland and destroying jobs and industry. The truth is that the insane economic policies of the Prime Minister, the Chancellor of the Exchequer, and the Secretary of State are destroying industries of all sizes almost day by day in Scotland, and everwhere else. But the Government have the brass neck to try to pass the buck on to local authorities, particularly Labour-controlled authorities, who are fighting desperately to save and create jobs and to preserve essential services.
ar from destroying jobs, local authorities are often desperately trying to maintain services even if that means some increase in rates. Indeed, they are trying not only to maintain and improve those services but to improve employment opportunities. I am talking, not about meaningless, worthless jobs, but about worthwhile jobs. I mean not only jobs for teachers, lecturers and social workers as well as the important jobs of janitors, schoolcleaners and dinner ladies, but jobs in the private sector and in the construction industry.
As the result of massive cuts in local government expenditure the Secretary of State has thrown more and more construction companies out of business and has put more and more construction workers on the dole. What possible justification can there be for that? They are on the dole although their skills could be used to maintain and improve essential services.

Mr. Bill Walker: What percentage of retailing and distributive costs do the rates represent?

Mr. Canavan: If the hon. Gentleman tables a question to the appropriate Minister, he might get an answer. I gave the figure for manufacturing industry—[Interruption.] Indeed, 0·66 per cent.—a wee bit over one half of one per cent.—of the total costs of manufacturing industry are taken up by rates. Therefore, it is nonsense to complain that the rates drive industries away and destroy jobs.
I reiterate that the Government seem hell-bent on destroying local government and local democracy in Scotland. The Government have little, if any, mandate to impose such measures on the people of Scotland. They gained the support of only a tiny minority of the people of Scotland at the last general election, and they have become increasingly discredited in the eyes of the local people. That has been demonstrated by successive local government elections. It is a tragedy that when the Conservative Party was elected to Government—I hope that the truth is now beginning to dawn on those on both sides of the House who had their doubts—one of its first acts was to repeal the Scotland Act. They wanted to start with a clean slate so that they could bring forward more repressive measures with which to hammer the people of Scotland.
This is the type of legislation that would have been devolved to a Scottish Assembly under the Scotland Act. If we have meaningful devolution—as I am sure we shall have some day—it will be the end of such rubbishy, discredited legislation. With a Tory Whipped majority, the Government are shoving this legislation through the House against the wishes of the majority of the elected representatives of the people of Scotland. If we had real devolution, we should see real local democracy for the people of Scotland.

Mr. Younger: The hon. Member for Glasgow, Cathcart (Mr. Maxton) started the fashion of quoting Shakespeare. The only comment that I can make about his speech is that it was
full of sound and fury, signifying nothing
because there spoke the representative of a party which, in the local elections nine days ago, ended up by controlling three out of 12 regions, if one includes the three island authorities. [Interruption.]

Mr. Deputy Speaker: Order. All other hon. Members have been heard in relative silence. We must give the Secretary of State a fair hearing.

Mr. Younger: If the Labour Party considers that three out of 12 is a great victory, I hope that it has many more such victories.

Mr. Canavan: rose——

Mr. Younger: The hon. Member for West Stirlingshire (Mr. Canavan) has already done very well this evening.
The debate has come a little later than was intended, and some of the speeches drawn up by Labour Members had been planned as part of a great election victory. Unfortunately, that victory was removed and the debate has been a prime example of the Aunt Sally technique of debate, which is that if the subject matter is not interesting enough or does not have enough content to give one something to talk about, one must put up a new set of

subjects and talk about them. We have not spent much time talking about the amendments, although the right hon. Member for Glasgow, Craigton (Mr. Millan) spent about one-eighth of his speech on them.
The debate is not about whether the Secretary of State should have the powers to curb the excessive and unreasonable spending of local authorities, and it is certainly not about the rate support grant settlement. We had a debate about that in February. I believed at one time that the Labour Party had purchased a video machine and that we were seeing a re-run of the right hon. Gentleman's speech on that occasion. However, it was not quite the same, for some very interesting reasons. In the brief time that I have available, I shall try to answer questions about the amendment and the questions that I was asked about rather wider matters, although I shall not go into the question of the Scotland Act 1978, at the request of the hon. Member for West Stirlingshire, because that would require a little more time.
If it were the case that the powers could be used against every local authority on every occasion for ever more, of course the Secretary of State of the day would more or less determine all the details of local authority expenditure. But I wonder whether anyone, including the right hon. Member for Craigton, has taken on board the extent of the powers. No Secretary of State can act against any local authority under the powers unless he can put forward a case and convince the House that that authority is incurring expenditure which is excessive and unreasonable. That is the point, as I am sure the right hon. Gentleman knows, that I made during an exchange at Question Time a few weeks ago. It is not sufficient that an authority has spent or is planning to spend over the guideline. No Secretary of State would persuade the House that an authority that is merely over its guideline was incurring excessive and unreasonable expenditure. If that point is once understood and taken on board, the remainder of the arguments that were made by Labour Members fall to the ground as being irrelevant. They do not apply.

Mr. Russell Johnston: Do I understand the Secretary of State to say that when, if he feels it necessary, he brings such orders to the House, no Whip will be applied?

Mr. Younger: That is not a matter for me. I would not wish to rely upon that anyway, because I always rely upon the power of my argument. If I may say so, modestly, I have never had any difficulty and I assume that my arguments are effective.
The right hon. Member for Craigton made several comments, having said that he was not clear about the nature of the powers. He commented on the rate support grant settlement. I cannot discuss all that now, but I shall try to answer briefly many of his questions.
The right hon. Gentleman said that it was ridiculous to suggest that local government expenditure was out of control because the increases in the last two years were 1·6 per cent. and 0·2 per cent. It depends what one means by out of control. The guidelines and the requirements of the national economy worked out by the Government envisaged a reduction in spending. That is not surprising since we have been through a deep recession and the amount of money raised has had to be cut. Every business, family and individual in the country has had to reduce


spending one way or another. Local government expenditure continues to move up when everyone else has to reduce expenditure. That means that local government expenditure is out of control.
I was interested that the right hon. Gentleman should mention rate increases. He said that massive rate increases were due to inflation factors not being correctly calculated in the rate support grant settlement. In a business, a family or in any body handling finances, if inflation is higher than the rate envisaged there is less money to spend. Anyone who has tried to run finances knows that. One reason why Britain's position has worsened over the years is that the public sector has been largely insulated from that essential discipline.
There is a more interesting side to the matter, which makes me wonder how much we should believe the right hon. Gentleman and his calculations. He does not appear to have them right. The right hon. Gentleman has made some categorical statements and forecasts. He said:
The result is that there will be a considerable increase in rates in 1982–83.
That is a fairly safe suggestion.
He continued:
However, I should be astonished if the overall increase in rates in 1982–83 is not over 20 per cent. or 25 per cent. I stand by that figure."—[Official Report, 10 February 1982; Vol. 17, c. 992.]
Very impressive. The right hon. Gentleman made his forecast, but how can he stand by it? What was the figure? The average increase in Scotland was only 15 per cent. [Hon. Members: "Only?"] That is a large discrepancy. I do not expect the right hon. Gentleman to get everything right, but some of what he says should be taken with a pinch of salt. and is what I usually do.
The right hon. Gentleman and hon. Member for South Ayrshire (Mr. Foulkes) talked of pupil-teacher ratios and schools being short of jotters, exercise books and rubbers. If that is so, it means that the local authority has decided to spend the money allocated to it on something else. The amount that is laid aside in the rate support grant settlement for these matters is the highest per head expenditure so allowed ever in real terms.

Mr. Maxton: rose——

Mr. Younger: No one can get around that fact. If shortages of essential educational items exist, it is because the money is being spent on something else. That should be clearly understood.

Mr. Millian: The Secretary of State has allowed 4 per cent. for teachers salary increases in the current year. The actual award is 6 per cent. If that goes through, as I trust it will, it will cost the local authorities another £9 million not provided for. How does he expect the local authorities to save that money? If they save it by reducing teachers, another 1,000 teachers would be sacked. Is that what he wants them to do?

Mr. Younger: The right hon. Gentleman has raised just the point. The negotiations for those sort of salary increases are conducted on different bases according to the group. The right hon. Gentleman must bear in mind that those concerned with taking decisions on these matters must consider what money they have available. The right hon. Gentleman may have noticed that in that case the arbitrator mentioned, as one of the reasons for the decision taken, that he had to bear in mind what the local authorities were likely to have available to spend. That is exactly the

point. The awards of the local employees are considerably above the 4 per cent. factor. Who on earth does the right hon. Gentleman think is going to pay for it, if those who are negotiating think that they can get away with incurring extra expenditure that they cannot afford? Until all those concerned in such negotiations realise that there is a finite amount of money available to pay for these things, and to make their decisions accordingly, we will have financial irresponsibility and the ratepayers and, ultimately, the taxpayers will be continually called upon to find sums that they know they cannot afford. The right hon. Gentleman found that to be the case when he was in office and he topic action on it. He has forgotten about it now and he will have a lot longer in Opposition to forget about it still further.

Mr. Millan: The Secretary of State is not answering the question. The matter went to arbitration. It is an arbitrator's award which the Secretary of State can ask the House to set aside. But if he does not ask the House to set it aside, £9 million must be found. How should the local authorities find that money? Should they cut the number of teachers? What should they do?

Mr. Younger: The right hon. Gentleman would be the first to object if I tried to lay down how individual local authorities should make their budget decisions. The right hon. Gentleman must not talk humbug about this. He knows that if I did that, he would be the first to complain.
The right hon. Gentleman also asked about a possible meeting with the new administration in Lothian region. there is nothing unusual about that. On several occasions, the previous administration asked for meetings with me and it got them. I had meetings with it and we discussed its problems. It was a helpful thing to do. The new administration asked for such a meeting, and we had it this morning. It was very useful. the hon. Member for Edinburgh, East asked what was the position now that there was a new administration. I told the new administration exactly what I told the old one. I said that the budgeted plans for expenditure are much too high and that I am awaiting a response to the letter that I sent to the council for its views on that matter.

Mr. Foulkes: What did it say?

Mr. Younger: I can assure the hon. Gentleman that there is no change in that position yet. The representative s of Lothian region explained to me that they understood that position and that they would be producing a reply to me as I have requested. That is a perfectly straightforward position and I hope that the hon. Gentleman will be satisfied about that.
The hon. Gentleman also asked whether the council would have absolute freedom to decide on the way it made its financial decisions on cuts and so on. I can confirm that that is exactly so. I have no intention of interfering in that sort of detail. The hon. Gentleman recounted some rather inaccurate memories of the calculations of posssible redundancies last year. The then administration did net refer only to the huge number of possible redundancies following on the initial suggestion that there might haw, to be a grant reduction of £53 million. I recall that when the reduction of grant was down to about £30 million, the then administration calculated that it would be necessary to create 15,000 redundancies. In fact, when the grant was reduced by £30 million the Lothian regional council achieved reductions of that order without introducing


compulsory redundancies, which was much to its credit. However, it means that the scare stories were a load of rubbish.

Mr. Strang: Perhaps there was an element of inaccuracy in my recollection, but I am certain that there is in the right hon. Gentleman's remarks. I hope that he will recognise that even if there are no compulsory or even voluntary redundancies, there are between 2,000 and 3,000 fewer jobs in the Lothian regional council. I hope that he will recognise also that he will reduce still further the number of jobs available within the council.
Secondly, the Lothian regional council saved only £6 million through staff reductions following the cut of £30 million. Does he recognise that it will not be possible for the new administration to take up such a small proportion of the cut in staff costs?

Mr. Younger: That might be true. We are seeking to reverse the trend of over-spending that has been taking place for about seven years. The Lothian regional council's spending caused equal problems when the right hon. Member for Craigton was Secretary of State for Scotland. The reversal will be much more difficult and painful because it has been so long delayed. If action had been taken three years ago when it was first suggested, the council's spending could have been brought under control without large-scale redundancies.
The hon. Member for West Stirlingshire referred to the local accounts commission. That is an issue that relates to a later amendment and I shall not deal with it now. Secondly, he suggested that we are seeking to introduce new powers. The powers to penalise local authorities for excessive and unreasonable expenditure have existed for many years. I think that the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) was one of those who introduced them in the Local Government (Scotland) Act 1966. In fact, the powers go back as far as 1929.
The original powers never needed to be used because until recently local authorities had not spent excessively and unreasonably. Secondly, the powers were retrospective and could be used only after excessive spending had taken place, which was unsatisfactory and unfair.
The Labour Party is saying that it is much more interested in helping to keep local authority expenditure up than it is in helping to keep rates down for those who have to pay them. That is a fair stance, but it is firmly ensconced in that position. I am content that that should be known as widely as possible. If that is known, there will continue to be election results that are favourable from my point of view.
If no amendment to the original powers had been made, the penalties—assuming that we have to have them—would have been unfair on the majority of local authorities in Scotland. They would be wholly unfair in view of the penalties imposed by the right hon. Member for Craigton. He had a general abatement in one of his years of office. That had to be operated by a straight across-the-board abatement. In such a case each local authority suffers a penalty, not in accordance with the amount it has overspent, but according to the formula by which rate support grant is distributed. It produces extremely unfair results. The advantage of the powers that I was granted by the House last year, which have a small amendment made to them in the clause we are debating,

is that it enables there to be some element of fairness. It enables the big overspenders—when there are big overspenders—to be called upon to make an appropriate contribution towards the overall overspending.
10.45 pm
If Labour Members can accept for the moment that there have to be penalties they should address themselves to the unfairness of doing it across the board. In that case authorities suffer a penalty without direct regard to the degree of their overspending. Hon. Members should consider whether it is much better that we take action against the authorities which are the main overspending offenders. That seems to be much fairer and I believe that that would be the general view, although not very often expressed, among those involved in local government. I hope that the House will accept that as being a genuine point worthy of consideration.

Mr. Foulkes: Accepting the Secretary of State's argument that he now wants to be more selective and penalise the authorities that are the largest overspenders, can he tell us why he has taken and proposes to take no action against Shetland?

Mr. Younger: It is usually a mistake to give way to the hon. Member for South Ayrshire. I have made no such decision. I have made it perfectly clear that I am looking at the spending pattern of local authorities, and that there may be more authorities against whom I may have to ask the House to give me power to take action. I have not decided to exclude any authority. The two that I have mentioned are the only ones about which decisions have been taken.

Dr. J. Dickson Mabon: On the Secretary of State's quite cogent argument on the question of equity, what is singularly lacking to buttress it is the fact that there has been no request from local authorities generally, including his own, for this kind of mechanism to be introduced.

Mr. Younger: I think that that is true. In the discussions that I have had with local authorities they have been much more concerned with trying to deal with the difficult problem of reducing expenditure. There has been no general request for such powers and most local authorities have said that they would rather not have such powers, but I have the responsibility of trying to be fair in the way that we have to reduce spending. That is not new. It has been done by all Governments in the past. the right hon. Member for Craigton had to do it. I am not sure whether the right hon. Member for Greenock and Port Glasgow had to, but if not he was fortunate. I maintain that if it has to be done it is better that it should be done fairly. The amendments are on a narrow point. The House will realise that if that provision in the Bill were removed, we should remove the clause that gives the Secretary of State the option—where a reduction has to be made in respect of a local authority—of returning that money to the ratepayers.
If that provision is removed it is another clear example of the Opposition's view that it is not important for the ratepayers to be relieved of excessive burdens when there is overspending. That is what the amendment means. If they vote on that all ratepayers in Scotland will be able to see clearly that the Opposition are not in favour of helping them with lower rates.
The second amendment would write in a requirement that local democracy should be taken into account, but most of those who voted in the recent local elections would agree that those who look after ratepayers are more on the side of local democracy than are those who continually want greater spending.
The third amendment questions what my Department does every year in sending to local authorities circulars explaining that certain detailed matters of account are left out of considerations of overspending. That is a technical matter. For example, housing is left out because it has its own support grant system. I see no advantage in introducing a muscle-bound procedure for something that is done simply by circular.
The fourth amendment deals with the quality of services. That is important, but much rubbish has been talked on this subject. It has been suggested by the right hon. Member for Craigton and others that no one can keep to the guidelines. Really? How did the Borders council manage to keep to them? How did Dumfries and Galloway keep very near to them? How did Grampian, a large region with heavy expenditure, manage to keep within 0·9 per cent. of the guidelines? How did Liddesdale manage to keep to them? How did Banff and Buchan and Gordon keep to them? How did Moray keep to them? How did Caithness keep to them? How did Ross and Cromarty keep within 2·9 per cent. of them?

Mr. David Lambie: How did Cunninghame keep to them?

Mr. Younger: Cunninghame did very well. It was only 3·1 per cent. above the guidelines.

Mr. Lambie: Cunninghame has a good Member of Parliament.

Mr. Younger: Of course it has a good Member of Parliament. If those authorities can keep, or virtually keep, to the guidelines, how can the right hon. Member for Craigton argue that it is impossible? Several hon. Members argued that the level of services would be decimated, but I can give comparisons to show that that claim is also rubbish.
Expenditure per head per year is £394·13 in Tayside, £398 in Fife, £370 in Grampian and £371 in Central. All those authorities provide reasonable levels of services. Yet the Lothian figure for 1982–83 is £454. That is so far out of line that it brings me back to my main point.
It is ridiculous to describe the powers as destroying local democracy, ending local government, making it not worthwhile for people to stand for councils and so on. None of the powers applies to any council unless it comes into the category not of being over the guidelines or being a bit extravagant, but of incurring expenditure that can be described under statute as excessive and unreasonable and which the House can be persuaded is so. The powers apply to only the small minority of authorities that incur such expenditure.
There have been no such authorities in most years, but in the past two or three years a certain madness has gripped some local authorities that have gone over the top. I suspect that many Labour Members disapprove of that in private, though they do not like to say so. It is because of the exceptional cases that the exceptional powers have had to be introduced. I look forward to the day when they never

have to be used again because local authorities think of their ratepayers' interests and keep expenditure under control.

Mr. Millan: The Secretary of State has just given a completely inadequate answer to the amendments that have been proposed by the Opposition. For him to argue that the powers that he is trying to take by the Bill are not unprecedented is absolute nonsense. If the necessary powers have existed since 1929, why has the Bill been introduced? Why did we have last year's Bill? Why did we have the Bill in the year before that?
Only the present Secretary of State has treated Scottish local authorities in the way in which they have been treated in the past two or three years. Not even previous Conservative Secretaries of State have taken such a dictatorial attitude. What is more, the right hon. Gentleman and his Conservative friends in local government in Scotland know it.
The Secretary of State said that the Borders had bee n doing well. In the election last week one of the leading Tories in the Border region quit the party because of the way in which the Secretary of State has been treating both that and every other region in Scotland. Moreover, the quality of the services has worsened, yet we must pay considerably more in rates for those inadequate services.
As to the Secretary of State's claim that he is being selective, last year there was both a selective reduction of rate support grant for and an overall penalty on every local authority in Scotland. This is being done not merely to the rate support grant. The housing support grant is receiving the same treatment. Every district council in Scotland is suffering a major reduction in housing support grant. That is why, in addition to rates being increased last year, there was a massive increase in rents.
It is hardly worth answering the Secretary of State with regard to individual local authorities. He knows that there is no justification, apart from political spite and prejudice, for singling out the two local authorities that he has so far chosen to penalise in 1982–83. He has not answered the points about Orkney and Shetland or about Lochaber and the rest. He has not the slightest intention of penalising Orkney and Shetland. If, for once in his life, he were honest with the House, he would tell us that now.
The Secretary of State held out Tayside as an example of a reasonable authority. It is 7·6 per cent. above his guidelines for this year. Moreover, it provides an inadequate range of services. That figure is considerably above the overspending which, according to the Secretary of State, there has been in the Strathclyde region. We know that he has not the slightest intention of penalising Tayside during the coming year under the powers of the 1981 legislation.
The existing powers are a major attack on local government in Scotland. They have been used with the maximum of political prejudice. The Secretary of State has shown that he cannot be trusted with the powers that he already has. That is why we are not prepared to give him the additional powers that he now seeks. I therefore ask my right hon. and hon. Friends to vote for the amendment.

Question put, That the amendment be made:

The House divided: Ayes 70, Noes 139.

Division No. 151]
[11.00 pm


AYES


Archer, Rt Hon Peter
Booth, Rt Hon Albert


Beith, A. J.
Boothroyd, MissBetty






Brown, Ron(E'burgh, Leith)
Litherland, Robert


Buchan, Norman
Mabon, Rt Hon Dr J. Dickson


Callaghan, Jim(Midd't'n&amp;P)
McCartney, Hugh


Campbell-Savours, Dale
McKay, Allen (Penistone)


Canavan, Dennis
McKelvey, William


Carmichael, Neil
MacKenzie, Rt Hon Gregor


Cocks, Rt Hon M. (B'stol S)
Maclennan, Robert


Cowans, Harry
McNamara, Kevin


Craigen, J. M. (G'gow, M'hill)
McTaggart, Robert


Cryer, Bob
McWilliam, John


Dalyell, Tam
Marks, Kenneth


Deakins, Eric
Marshall, D (G'gowS'ton)


Dean, Joseph (Leeds West)
Maxton, John


Dewar, Donald
Millan, Rt Hon Bruce


Dixon, Donald
O'Neill, Martin


Dormand, Jack
Pavitt, Laurie


Dunwoody, Hon Mrs G.
Penhaligon, David


Eadie, Alex
Powell, Raymond (Ogmore)


Eastham, Ken
Ross, Ernest (Dundee West)


Evans, Ioan (Aberdare)
Sever, John


Ewing, Harry
Skinner, Dennis


Foulkes, George
Snape, Peter


Ginsburg, David
Strang, Gavin


Grimond, Rt Hon J.
Tinn, James


Hamilton, James(Bothwell)
Wainwright, E. (Dearne V)


Hamilton, W. W. (C'tral Fife)
Welsh, Michael


Harrison, Rt Hon Walter
White, Frank R.


Hogg, N. (EDunb't'nshire)
White, J. (G'gow Pollok)


HomeRobertson, John
Wilson, Gordon (DundeeE)


Howells, Geraint
Woolmer, Kenneth


Hughes, Robert (Aberdeen N)
Young, David (BoltonE)


Janner, Hon Greville



Johnston, Russell (Inverness)
Tellers for the Ayes:


Lambie, David
Mr, George Morton and


Leadbitter, Ted
Mr. Frank Haynes.




NOES


Alexander, Richard
Bruce-Gardyne, John


Alison, Rt Hon Michael
Budgen, Nick


Ancram, Michael
Cadbury, Jocelyn


Arnold, Tom
Carlisle, John (Luton West)


Aspinwall, Jack
Clarke, Kenneth (Rushcliffe)


Atkins, Robert (PrestonN)
Cope, John


Atkinson, David (B'm'th,E)
Corrie, John


Beaumont-Dark, Anthony
Cranborne, Viscount


Benyon, Thomas (A'don)
Dorrell, Stephen


Berry, Hon Anthony
Douglas-Hamilton, LordJ.


Bevan, DavidGilroy
Dover, Denshore


Biggs-Davison, SirJohn
Dunn, Robert (Dartford)


Blackburn, John
Emery, Sir Peter


Bonsor, SirNicholas
Fairbairn, Nicholas


Bright, Graham
Fairgrieve, SirRussell


Brooke, Hon Peter
Faith, Mrs Sheila


Brotherton, Michael
Fenner, Mrs Peggy


Brown, Michael (Brigg&amp;Sc'n)
Fletcher, A. (Ed'nb'gh N)

Question accordingly negatived.

Mr. Dewar: I beg to move amendment No. 128, in page 3, line 40, at end insert—
'(10) For the avoidance of doubt it is hereby declared that any refusal by a local authority to reduce that authority's estimated expenditure following a report proposing a reduction in rate support grant approved by Parliament in terms of section 5 of the Local Government (Scotland) Act 1966 as amended by the Local Government (Miscellaneous Provisions) (Scotland) Act 1981 shall not be an unlawful breach of fiduciary duty on the part of that local authority and shall not be the subject of a special report by the Controller of Audit under section 102(3) of the Local Government (Scotland) Act 1973 and no action by the Secretary of State under section 104 of the said Act of 1973 shall follow from any such failure.'
We had a wide-ranging debate on the last group of amendments. This amendment is much more specialised and narrow in its range, although, strangely, it deals with a matter that my hon. Friend the Member for West Stirlingshire (Mr. Canavan) happened upon during his remarks.
We are dealing not so much with the future as in a sense with the past, because the amendment looks back at the year 1981–82, and in particular at the situation which has arisen in respect of the Lothian, Stirling and Dundee local authorities. It is a familiar series of events and one that I do not need to rehearse in any detail in this debate. Suffice it to say that the Secretary of State took it upon himself to decide that those local authorities had estimates that were excessive and unreasonable. He came to the House with the relevant and necessary orders and it was decided, against the fierce opposition of Labour Members, that those local authorities should be faced with the prospect of a clawback from their rate support grant during the financial year, or they would have to cut their estimated expenditure.
It is important to emphasise something which I certainly understood to be the position; that is, that the authorities had a choice. It was a weighted choice. The Secretary of State was under the impression that they would exercise that choice in a way that was acceptable to him, by making repayment or reimbursement to the ratepayers. As the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) said during many a weary hour of the proceedings on the Local Government (Miscellaneous Provisions) (Scotland) Bill, it was a choice that was to be left to local authorities. But what happened was that when local authorities exercised that choice and decided not to pay back, they discovered that they were to be penalized by the Secretary of State. There was no option of holding on to the grant which was not now to be used to fund the expenditure which had been cut, and there was no way in which that could be held against future rates in 1982–83.
I say that this is all of historical interest because the whole point of the first part of the Bill is to close that loophole and to ensure, in the view of the Secretary of State, that it will not happen again, because in future he will be able to make a direct rate reduction.
What worries Labour Members is that the Secretary of State decided, when there was no reimbursement of the ratepayers, to make a clawback out of the rate support grant in any event, and it is now being suggested that the failure to follow what the Secretary of State thought was the right course amounted to a breach of fiduciary duty. We have had a report from the controller of audit which suggests that there has been a breach of fiduciary duty by the Lothian, Stirling and Dundee local authorities, and that report has been passed to the accounts commission.
One of the byproducts of arbitrary and oppressive legislation is that it encourages a trudge to the courts. We have seen a deal of it south of the border and I fear that we may see a lot of it north of the border. We have seen people going to the courts for a decision on whether various actions by local authorities or by the Government have been ultra vires or in disregard of their statutory duties. I take no particular pleasure in that situation, but I am afraid that it will be a recurring and increasingly common theme.
The amendment is tabled in simple—almost narrative—terms. We are suggesting that, for the avoidance of doubt, the refusal by a local authority to reduce its estimated expenditure, following a report proposing a reduction in rate support grant, should not be taken as an unlawful breach of fiduciary duty and should not be the subject of a special report by the controller of audit and ultimately of action by the Secretary of State under section 104 of the Local Government (Scotland) Act 1973.
11.15 pm
It may be that this is all a bit academic because, as the House will know, we have had a special report by the controller of audit, which has already been passed to the accounts commission. Whether that is a difficulty with regard to the amendment is of little importance. We are anxious to know what will happen and what is in the Secretary of State's mind. As I understand it, there has been a special report, and now reference to the Court of Session for a judgment, presumably to try to establish in general terms what, under the law of Scotland, constitutes the fiduciary duty of a local authority to the ratepayers.
This is an extremely complex business, as we know from the English precedents. We have been following from afar, and are relieved that it is from afar, the complicated arguments that have resulted from the Bromley v GLC case, the transport case. Many of us are aware of some of the better known earlier English judgments, such as Prescott v Birmingham Corporation. There have been endless arguments, for example in the Prescott case, about whether a free bus travel scheme constitutes a gift to one section of the population at the expense of another and is therefore a breach of fiduciary duty, or something that is almost analogous to a trustee relationship between a local authority and its ratepayers who supply at least a percentage of the cash.
I have very little sympathy with the argument, which is based on a misunderstanding, about how much of the finance of a local authority comes from the domestic ratepayers. It is particularly the question of ratepayers that worries the Secretary of State and the House. As I understand the figures, the total percentage of local authority expense that comes from domestic rates in Scotland is about 13·5. All the rest comes either in. Government grant—55 to 56 per cent.—or from non-domestic ratepayers of one kind or another.
In any event, it seems to us—and this is the point of the amendment—monstrous that we should have a special. report from the controller of audit to the accounts. commission. There will then be an application to the Court of Session and there is a clear possibility, presumably under section 103, that there could be a surcharge on councillors as a result of the proceedings. I recognise that under section 104 it is possible for the Secretary of State to take no action if he believes that the council has acted


reasonably. No doubt we could spend many hours, here and up and down the length and breadth of Scotland, arguing about what the word "reasonably" means in this context.
It would be an extremely damaging, embittering, decisive and counter-productive exercise to go down this road and get to a conclusion that might be logical, but might become inevitable, because of the entrenched prejudices that the Secretary of State has shown in his handling of local government affairs over the past three years. We want to save him from that. The amendment deals with a small group of councils which were faced with a force majeure and put in a position where they were told that they were spending excessively and unreasonably, despite the fact that they genuinely felt—and I have no doubt about the genuineness of their feeling—that they represented the interests of the electorate that had put them into power.
Those councils, having been told that they were spending excessively and unreasonably, were forced to cut that expenditure. They then found that the money that was saved could not be retained against expenditure in a future financial year. The noney disappeared back into the maw of the Treasury. If the Secretary of State is correct in saying that there was some sort of robbery of the domestic ratepayer, or of ratepayers generally, then the Secretary of State, who owes Lothian £30 million and who owes money taken from other local authorities, is guilty of a form of fiscal reset in terms of the local authority financial system.
After all the bitterness, friction and confusion, it would be a manifest tragedy and a dreadful mistake if we were to go ahead with a long and difficult legal process, involving Court of Session judgments, ultimately surcharge and all that that means in personal misery of the individuals concerned, and the removal from the realms of possibility of a return to the co-operation which the hon. Member for Edinburgh, South (Mr. Ancram), the chairman of the Scottish Conservative Party, hoped would soon return to Scottish local government.
If we were to do any of the things that are potentially involved in continuing the surcharge and the penal provisions of the 1973 Act we would make a great mistake, which would not be in the interests of the Secretary of State and certainly not in the interests of local government machinery. It is to avoid that that we have tabled the amendment. We seek to ensure that in the special and rather unusual circumstances that arose in the confusion of the use for the first time of the penal engine constructed in the Local Government (Miscellaneous Provisions) (Scotland) Act the matter should go no further. I believe that we are justified in doing so.

Mr. Canavan: I want to mention briefly the case of Stirling district council, which lies partly in my constituency and which was one of the local authorities referred to in the report by the local government controller of audit.
The Secretary of State knows the details of the long story of the confrontation that he engineered against Stirling district council, going back a year ago when he singled out that council for special treatment under the Local Government (Miscellaneous Provisions) (Scotland) Act. He claimed that it had been guilty of overspending to an excessive degree. He refused to say in detail why it

had been guilty of excessive overspending. He did not put up a good case to justify the penal measures that he attempted to impose on the council.
As I said on the last amendment, my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) and I made repeated submissions to the Secretary of State and the junior Ministers at the Scottish Office. We tried to mediate as reasonable men, but we found that the Secretary of State and his Ministers were very irrational people. It became increasingly obvious during the drawn-out confrontation that the Secretary of State was not interested in reaching a reasonable compromise.
The Stirling district council produced a reasonable alternative, which would have gone some way to meet the targets of the Secretary of State but which would not have necessitated the reduction in rate support grant that the Secretary of State seemed hell-bent on imposing. Despite meetings at ministerial level and at other levels, which my hon. Friend the Member for Stirling, Falkirk and Grangemouth and I helped to initiate, the Secretary of State stood firm. He imposed what was, in effect, a kind of fine, by withdrawing £700,000 in rate support grant from Stirling district council.
The council refused to hand money back to the ratepayers. The Secretary of State criticised that decision, in the House and elsewhere. We thought that that was the end of the matter. The Secretary of State never claimed that the district council was acting illegally. Never in the course of private or public discussions did the Secretary of State claim that the district council, by following either of the options open to it, was in danger of acting against the law. We thought that that was another unfortunate chapter in the sad history of local government, written mainly by the Secretary of State for Scotland. We thought that it was over and done with, that it was water under the bridge.
However, a report was then produced by the controller of local government audit in Scotland criticising the district council. Everyone has a right to criticise local government in general, or for certain decisions taken by a local authority, but in criticising the Stirling, Lothian, and Dundee councils the controller of local government audit said that in his opinion the councils had acted illegally. The matter has now gone to the Court of Session for a judgment. I hope that the Secretary of State, despite the sub judice rules, can give a helpful reply.
We all know who was Solicitor-General for Scotland at the time—the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn). He should have been involved in fighting the case for Stirling district council because part of his constituency lies in the Stirling district. His standing in legal circles in Scotland is so low at the moment that he has to look for jobs in South Africa or defend mercenaries who attempt a coup in the Seychelles. Nevertheless, there must be someone in the Crown Office or the Scottish Office who should have advised the Secretary of State on what is legal and what is illegal, and given local authorities the appropriate advice. Why is it only at this late stage that the controller of local government audit in Scotland has reported that in his opinion the local authority was in breach of a fiduciary duty and was breaking the law?
The repercussions are extremely serious. If the Court of Session gives a judgment against the council it is not merely a question of publicly declaring that Stirling, Dundee, and Lothian councils acted illegally. My


understanding is that the councillors who were party to the decision could be surcharged. Immediately the decision was announced by the controller of local government audit, the leader of the Tory opposition in Stirling district council made desperate inquiries to ascertain whether she and her colleagues could be surcharged. Apparently she was advised that the councillors who voted against the decision were not liable to be surcharged. That means that only 10 of the 20 councillors could be surcharged. Every Labour district councillor in Stirling district could be surcharged to the tune of £70,000.
Is the Secretary of State serious? Is that possible or likely? Is that the encouragement that he will give to those who often sacrifice much to offer themselves for public service? All the time they felt that they were acting in the best interests of those whom they were elected to serve. At this late stage they find that they could be surcharged £70,000 each. They probably could not raise £70,000 between them, let alone £70,000 each.
11.30 pm
Therefore, those people could be driven out of local government. Is that what the Secretary of State wants? Is he so thrawn, stubborn and vengeful that he wants to use the law to drive Labour councillors out of the positions to which they have been elected? As a result of the Bill, local democracy is at stake. We are not here to debate the rights and wrongs of the decision taken by Stirling district council, Dundee district council or Lothian regional council. However, if, as the Secretary of State argues, their decisions were against the interests of those who elected them—the ratepayers—the solution lies in the hands of those ratepayers or electors, through the system of local government election. The solution should not lie in the Secretary of State's dictatorial edict or with High Court judges or judges sitting in the Court of Session.
As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who has far more experience and knowledge of the law than I, said, it is unfortunate that both north and south of the border there is an increase in litigation on matters of local government. People run to the courts. There is something wrong with the legislation enacted by the House if an increasing number of local authorities or individuals run to the courts to get judgments about this, that and the other. It is surely indicative of the undue haste and lack of preparation by the Scottish Office, and the various departments within it, that such tatty, unclear legislation should reach the statute book. Some bloke who reads about it in the office of the controller of audit will then say "Aha, these people may have been acting illegally and may be liable to surcharge. Let us refer the matter to the Court of Session and see what the judiciary has to say."
Those are all important matters of principle and important matters for local democracy. The Secretary of State dodged a question in our last debate, but I hope that he will now give a considered reply. Where on earth do we go from here? Is not local government legislation in a hopeless mess, particularly that introduced by this Government? Yet the Government seem intent on introducing even worse legislation, which will make local government even less democratic.

Mr. Younger: With respect to the hon. Member for West Stirlingshire (Mr. Canavan), I did not dodge the

question last time. I merely did not answer it because he asked it under the wrong amendment. However, I believe that I can reassure him.
We cannot accept the amendment, because it would pre-empt the function of the Court of Session in relation to a question of law quite properly arising under the existing statutory provisions. The controller of audit is under a statutory duty to make a special report if he is of the opinion that any item of account is contrary to law. His duty is contained in section 102(3)(a)(i) of the Local Government (Scotland) Act 1973. Having formed such an opinion, he has no option but to make a special report to the commission.
The commission's functions in relation to a special report are detailed in section 103 of the 1973 Act. In particular, the commission may
if they think fit, and shall if so directed by the Court of Session, state a case on any question of law arising on the special report for the opinion of the Court of Session.
The commission has decided to state a case on the question of law raised and it is now for the Court of Session to determine it.
However, I hope that I can reassure the hon. Gentleman on one point about which he expressed some concern. I know only what I have read in the press about the matter. The Controller of Audit has questioned an item of account, not an item of expenditure. If that is so, I am advised that in any case a surcharge could not arise because it is questioning an item of account and not an item of expenditure. I hope that that reassures some hon. Members who may be worrried about the point.

Mr. Dewar: We are all feeling our way a little on this, but it is a matter of some importance. The Secretary of State has obviously received advice on the matter and I appreciate the care with which he is informing the House. Can he tell us what action is open to him, because that is the key question? I can see that, by using section 103, we can get an opinion of the Court of Session, which may be of some general interest in terms of defining the law and the fiduciary nature of the relationship between the ratepayer and the local authority. The important point is that at some stage, under section 103, a report will come to the right hon. Gentleman and under section 104 some action can flow from that, which I understand can include an order that payments be made by the councillors to the local authority. Is the Secretary of State saying that that will not arise because of his presupposition of the nature of the Controller of Audit's report? If it cannot arise, whit action is open to him as Secretary of State under section 104, because presumably the process does not just run into the sand and come to a dead stop? Some options must be open to him.

Mr. Younger: I appreciate the hon. Gentleman's point. I must be a little careful in what I say because I have not seen the detail of the document. I have seen only what I read in the press and anything that I say this evening must be qualified by the fact that it cannot be absolutely definitive. The action that is open to the Secretary of State, assuming all the matters that the hon. Gentleman said that we should assume, depends on whether the Commission makes any recommendations to the Secretary of State. I am advised that if the position is as we believe from the press, surcharge could not arise.
However, I shall be grateful if the hon. Gentleman will not hold me to every detail because I am in the dark and


I do not know the precise details of the present position. I certainly do not know what sort of report might be produced and whether the Commission would make any recommendations to the Secretary of State.

Mr. Dewar: I have the Accounts Commission's press release, which was helpfully circulated. It says at the top:
Special reports: Lothian regional council—rate support grant … Dundee district … Stirling district
and so on. I went confidently to the House of Commons Library and discovered that those special reports do not appear to be available. I do not know whether that is normal, but it is unfortunate. Perhaps I could obtain them by begging copies from individual councillors, but it might be for the convenience of everyone if some effort could be made to provide those reports. No one would be prejudiced if we knew what we were debating.
I am not happy about the substantive point. The Secretary of State says that if a recommendation is made by the Accounts Commission action can be taken. On a cursory reading of the statute it appears that it is possible for a recommendation to be made for an order requiring any person found responsible for incurring or authorising expenditure over the period of the loss or deficiency,
to pay to the local authority concerned an amount not exceeding the amount of the said expenditure … directing the authority to make such rectification of their account as appears to the Commission to be necessary.
Is the Secretary of State saying that that is not a matter of expenditure, but that the only option open to him is a direction to the authority to rectify its accounts, which would not have an impact on the individual councillors?

Mr. Younger: I am advised that such an event cannot lead to surcharge. If the Commission makes a recommendation to the Secretary of State, he has to decide how to respond, but there is no statutory obligation on him to carry out the recommendation in whole or in part. He has discretion. I understand that it could not lead to surcharge. I shall examine that more closely when I see the details of the recommendations.
The Controller has a duty to serve a copy of the recommendations on the authority or on any other person affected. The Secretary of State would be involved only later, if at all. The matter is for the controller of audit, the Court of Session and the interested parties.
It would not be right to legislate as suggested. I appreciate that we are discussing a probing amendment. The court must determine whether the Controller's opinion is well founded in law. That is right. There may be room for argument about whether the controller is right, but the judicial process and not an avoidance of doubt provision is the correct way to deal with the matter.

Mr. Dewar: Whatever the nuances and complexities, it is clear that under section 104(2) of the 1973 Act the Secretary of State's power is discretionary. The Act states that before he can move against councillors or an authority he must be satisfied that the person or persons acted reasonably or in the belief that their action was authorised by law. In the case that we have in mind there was no intention to defy the law in relation, at least, to the payment back to ratepayers. There may have been a political decision, but we saw it as a political division and argument. It was not a matter of knowingly defying the law. In such circumstances, the use of the power under section 104(2) is inappropriate.

Mr. Younger: I note what the hon. Gentleman says. I wish to make no comment. I am not involved at this point. The Court of Session must decide whether the matter is within the law.
It is up to me to wait and see whether a report is given to me. If so, I shall carry it out according to statute in whatever way is appropriate when I see the nature of the report. I hope that the hon. Gentleman will be prepared to withdraw the amendment.

Amendment negatived.

Mr. Dewar: I beg to move amendment No. 7, in page 4, line 6 after 'been' insert 'wilfully'.
This is a narrower matter in the sense that it deals with the motivation of someone who may find himself in difficulties under clause 2. Clause 2 refers to the prohibition of using sums from loans fund to offset the effect of the determination of new rate.
Clause 2(2) states:
If the Secretary of State is of the opinion that subsection (1) above, or any term or condition imposed under the proviso thereto, has been contravened the local authority shall, on such opinion being intimated to them, reimburse their loans fund forthwith or within such time as the Secretary of State may allow.
I accept that it is important to have machinery in clause 2 to force reimbursement where there has been sharp practice in the view of the Secretary of State in that there has been a deliberate attempt to borrow to offset the loss of revenue that has resulted from an order limiting the rate poundage and reducing the rate poundage that had been determined by the local authority.
One of the problems is that—I am sure that the Under-Secretary of State will accept this because it has been much canvassed not only in Committee but by local authority officials—there are sometimes substantial difficulties in determining when exactly borrowing is being done for that purpose. There is a cyclical pattern of borrowing in most major local authorities which is dictated by and is a response to the varying pattern in the collection of rates revenue. All major local authorities have to borrow on the revenue account to make up for the delay in collecting their rates.
An argument could arise over whether the borrowing had been an attempt to get around the shortfall following after an order had been made under the powers in part I, or whether it was merely an attempt to maintain a proper flow of revenue against the somewhat uneven collection of moneys from rates.
The amendment is an elementary precaution which in no way damages the Government's central approach. It is not a wrecking amendment and is not of great political significance, but it would put into the Bill a little safety for the local authority if it was made clear in subsection 2 that before a repayment had to be made the contravention of the ban on borrowing had been willfully breached by the local authority concerned, and not inadvertently through error, confusion or a lack of administrative tightness.
The amendment is merely designed to make it clear that before the Government can move in and order repayment in this way they should be satisfied that there was an element of wilfulness about the breach and that it would be on that basis only that the repayment could be ordered. That is a clear and helpful suggestion, and I hope that it commends itself to the Minister.

Mr. Allan Stewart: I fully understand the point that the hon. Member for Glasgow, Garscadden (Mr. Dewar) is making. He said clearly and fairly that the purpose of the clause is to prevent an authority from borrowing to make up the whole or part of the difference between the original rate and the redetermined rate, so compelling it to reduce expenditure. The hon. Gentleman has asked whether the Secretary of State will be able to distinguish between borrowing that is necessary for the day-to-day management of an authority's finances—I accept his contention that that is cyclical—and that which is intended to make good the loss of revenue that is caused by a rate reduction.
There are several reasons why the Secretary of State will be able satisfactorily to monitor borrowing under the powers provided in the clause. First, such action will require a deliberate decision by the council. Finance officers will be aware of the statutory position and will advise their councils accordingly. If a council were to persist in its instructions to its officers, the officials involved would no doubt seek explicit instructions to safeguard their position. In the extremely unlikely event that the council and the officials connived to contravene the prohibition, that would come to light through the auditors; scrutiny of the accounts.
The sums required to offset a rate reduction would be substantial and would no doubt attract attention. For these reasons there can be little room for doubt if an authority has contravened the prohibition or borrowing conditions. It must not do so wilfully and the hon. Gentleman accepts that. It is the authorities; business to ensure that they do not do so negligently or incompetently. I understand the hon. Gentleman's argument, but the amendment would create a loophole in the provisions and I fear that I cannot recommend its acceptance to the House.

Mr. Dewar: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3

REDETERMINATION OF ESTIMATED AGGREGRATE AMOUNT OF RATE SUPPORT GRANTS

Mr. O'Neill: I beg to move amendment No. 9, in page 4, line 23, leave out from 'Act' to end. of line and insert 'only that amount for that year which is necessary to meet increases in loan charges'.
This amendment is an attempt to clarify the meaning of the clause. The amendment was introduced towards the end of our consideration of the Bill in Committee in response to the considerable anxiety of local authorities. There was only limited time available to consult the Convention of Scottish Local Authorities. In a letter to all hon. Members the secretary of the convention stated that the new system of cash planning would not afford to the Government the flexibility that the previous rate support grant arrangements had made available. He said that the loan charges, which were one of the variables in the old rate support grant arrangements, were anticipated for the year and the moneys were made available. He explained that if the loan charges were not as great as had been anticipated, there was a degree of flexibility and some money was available for the local authorities.
The Government maintained that the purpose of the clause was to take account of any variation in loan charges.

The convention felt that there were sinister undertones in the powers that the Minister was taking to himself. Since the Minister gave his explanation in Committee there h as been nothing else to suggest that his intentions are anything other than sinister. I refer to the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), the then Under-Secretary of State, who is now the Under-Secretary of State for Foreign and Commonwealth Affairs. No one was convinced by the arguments that he advanced. We are trying to state explicitly in the amendment that, if any powers of this nature are to be contained in the clause, they shall refer only to loan charges within the year concerned. It is well nigh self-explanatory. It is intended to make the Government's intentions more specific. If the Government do not accept the amendment, one can only assume that there were other intentions behind the clause. If there is no other intention and the amendment is defective I am sure that the Government will take the opportunity to correct the omission in another place. Despite their enthusiasm to amend the Bill they have not sought to do so. One can only assume—until the Minister speaks—that it is because of the clarity and the succinctness of the amendment. If that is not the case the intentions of the Government remain obscure. The suspicion was expressed by many local government finance officers—they are not politicians, they are the specialists, whose responsibility it is to guide officials in local government, including the finance officer of Central region, the senior official of Lothian region, and the finance officer of Strathclyde—that that clause went further than the Government's intentions.
I hope that the Government will take the opportunity to clarify the position because there is a great deal of confusion in local government as to what the intentions are. We hope that this modest amendment will clarify the position. If it is defective there are other means open to the Government.

Mr. Allan Stewart: I hope that I can clarify the position for the hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill). The amendment would remove the Secretary of State's powers to redetermine the rate support grant except in the event of an increase interest rates. The power to redetermine the aggregate amount of grant in the course of the grant year is an essential element of the cash planning system provided by clause No. 3.
Under the former system of rate support grant the Secretary of State could adjust the cash paid by an increase order to take account of cost and price increases. Under cash planning the maximum amount of grant will be determined at the main order. There will no longer be a need for an increase order because the cash figure will include an allowance for cost and price increases. The Secretary of State will still need the power to review grant during the course of the year and redetermine it if necessary. As presently drafted the clause allows the Secretary of State to increase the amount to take account of increases in loan charges resulting from changes in the interest rate. That has not been questioned, and is generally accepted. However, the Secretary of Stale cannot be limited to that power alone. He must also have the power to vary grant for other reasons. He may wish for policy reasons to reduce the grant where he is satisfied that the level of expenditure planned by local authorities is damaging to the public interest. A reduction of that nature


has been made by successive Governments. It was made by the Labour Government in 1976–1977. The Secretary of State may wish to reduce grant to take account of a drop in interest charges. He must have the power to vary grant to take account of changes in local authority responsibilities or unforeseen circumstances. To remove that power except in relation to interest rates, as the amendment would do, would take away essential flexibility. We cannot accept the amendment tabled by the hon. Member for Clackmannan and East Stirlingshire, but I hope that that explanation makes the position clear.

Mr. O'Neill: The debate has served a purpose, because the Under-Secretary has made it clear that the aim of the clause is to give the Secretary of State power to reduce the amount available and not only in respect of changes in interest rates. That was not made clear to us in Committee and the hon. Gentleman's predecessor sought to hide behind the argument that general abatement powers had been exercised by previous Secretaries of State.
12 midnight
It is obvious that the power can go far wider and, therefore, the fears expressed by CoSLA and local government financial officials, are justified. The power is yet another turn of the screw by the Government. It restores to the Government powers which, it was imagined, they would no longer need to have to hand. Such is the Government's fear that a local authority may exercise discretion in a way that they consider unacceptable for policy reasons that they take power to curtail, cabin and confine local democracy. It was never suggested that the powers would be used in that way. They are another weapon for the Secretary of State in his efforts to control local democracy.

Amendment negatived.

Clause 5

EFFECT OF SPECIFIC POWER OR DUTY TO INCUR EXPENDITURE AT ONE TIER OF LOCAL GOVERNMENT ON EXERCISE OF GENERAL SUCH POWER AT DIFFERENT TIER

Mr. Allan Stewart: I beg to move amendment No. 118, in page 5, line 15, leave out
'incur, or contribute towards defraying, expenditure'
and insert—

'(a).incur; or
(b) unless invited to do so by the other authority, contribute towards defraying expenditure'.

Mr. Deputy Speaker: With this, we may take the following amendments: No. 13, in page 5, line 20, at end insert:
'unless the authority so authorised is incurring or intends to incur such expenditure and invites the other authority to so contribute or unless the authority not so authorised has sought and obtained the consent of the Secretary of State'.
No. 14, in clause 6, page 6, line 3, after 'premises', insert:
'including any Enterprise Zone, partnership project with the Scottish Development Agency or any other industrial facility of special significance'.
No. 15, in clause 6, page 6, line 5, leave out 'paragraph (a) or (d).'
Government amendments Nos. 16 and 17.
No. 18, in clause 6, page 6, line 15, after 'promotion', insert 'whether'.
No. 19, in clause 6, page 6, line 16, at end insert 'or not'.
No. 20, in clause 6, page 6, line 22, after 'State', insert
'which will not be unreasonably withheld'.
No. 21, in clause 7, page 8, line 5, at end insert—
'(4) Notwithstanding the said re-allocation of responsibilities a regional council or regional planning authority may by agreement join with any island or district council or general or district planning authority to manage or advise on any project initiated or carried on under powers affected by this section if that project would be of benefit to their area or any part of it.'

Mr. Stewart: My fellow Under-Secretary, my hon. Friend the Member for Edinburgh, North (Mr. Fletcher) will deal with the amendments on industrial promotion, so I shall limit my remarks to amendments Nos. 118 and 13.
Amendment No. 118 fulfils an undertaking given in Committee that the Government would consider further the respective merits of an amendment tabled by the hon. Member for Glasgow, Garscadden (Mr. Dewar) and a separate proposal by CoSLA, the effect of which would be to introduce limited flexibility into clause 5. As the hon. Member for Garscadden knows, we have consulted CoSLA about his Committee amendment and it has said that it would regard as acceptable a provision on the lines proposed by the right hon. Gentleman.
Amendment No. 118 reflects the sense of the hon. Gentleman's proposal. It will enable a local authority that is not statutorily responsible for a function to contribute to expenditure incurred on it by the responsible authority, at the invitation of the latter. That will give a useful flexibility to what was a restrictive provision and will allow a co-operative approach to a project by both tiers if the circumstances so suggest. At the same time, it ensures that the initiative will always lie with the responsible authority, the invitation of which will be required before the second authority can consider expenditure on a function for which it has no statutory locus. I am sure that that is right and it is compatible with the philosophy of the Stodart committee.
I hope that the amendment will commend itself to the House and that, in the light of our response to the undertakings given in Committee, the Opposition will not press amendment No. 13, which is, in effect, a combination of the hon. Member for Garscadden's first amendment and the original proposal of CoSLA.

Mr. Millan: The Under-Secretary's comments are useful as far as they go, and he makes the fair point that he has responded to points made by the Opposition in Committee. I am sure that my hon. Friends will be happy about that. It means that amendment No. 13 is not necessary. However, I am not sure that that applies to amendment No. 21, in clause 7, which is a much more general clause.
I should be grateful if the Minister would say something about that. The purpose of amendment No. 21 is that there should be co-operation between a regional council and a district council when managing or advising on
any project initiated or carried on under powers affected by this section".
That would be a useful addition to clause 7. Bearing in mind what the Minister said on amendment No. 118, I should have thought that the principle could be accepted.
I shall deal with the Opposition amendments relating to industrial promotion in clause 6, starting with amendment No. 14. The provisions in relation to district powers are limited. Not only do districts have limited powers but what


powers they have are circumscribed by the provisions of clause 6 as at present drafted. I shall not rehearse the argument about that. As I said on Second Reading, it is wrong to treat all districts as having no legitimate interest in industrial promotion when one considers that there are some large districts such as Glasgow, Aberdeen, Dundee and Edinburgh which, in terms of industry—one can say this without disparaging regional councils—are considerably more important in terms of the number of people employed, industrial estates, industrial development and the rest. Yet, under clause 6, the powers of the districts are circumscribed. The Opposition amendments are not designed to go back over the argument of whether these should be a district or regional functions. I do not agree with what the Government have done in principle. The amendments are designed to open up the clause and extend the powers available to the district by removing some of the inhibitions on them provided by the clause as drafted.
Clause 6(3)(b) provides that where the district council has powers—they are circumscribed—it can exercise them only as regards specific industrial sites or premises that are owned by it. Amendment No. 14 extends that by adding the words
including any Enterprise Zone, partnership project with the Scottish Development Agency or any other industrial facility of special significance".
I am not proud of the last phrase, which is vague, but it makes the general point that it is unnecessary and undesirable to limit district councils as the clause does. If this type of approach is made, there should be a wider definition of the kinds of premises, sites and facilities for which the power should be available. The obvious extensions relate to an enterprise zone, of which we have only one in Scotland now, or a project entered into by partnership with the Scottish Development Agency.
Amendment No. 15 removes another inhibition on local authorities. Even when the premises and the circumstances in which the district council may have some powers have been defined, the powers themselves are limited to
paragraph (a)or (d) of the definition of 'promotion' in subsection (4)",
which cover only
advertising and preparing and disseminating information
and
carrying on correspondence".
It would certainly be extraordinary if a district council could not even carry on correspondence with its own factories or factory sites, so that is scarcely a major concession to district authorities.
I see no reason at all why this part of the clause, which deals with the authority's own premises and sites, should exclude district authorities from
participating in trade or investment missions
Or
holding or taking part in such activities as seminars, exhibitions and symposiums
as provided for in paragraphs (b)and (c)
Amendment No. 15 therefore seeks to remove the restriction to paragraphs (a) and (d)so that the authority's powers in relation to promotions would also include paragraphs (b) and (c)
Amendments Nos. 18 and 19 go together. Again, subsection (3)(c) makes the very restrictive provision that the district council might,
at the invitation of

(i) the Secretary of State;
(ii) a regional council; or
(iii) a body designated … by the Secretary of State"

be involved in
 "contributing financially to, or participating in, any such promotion engaged in by the inviter or inviters".
Provided that the invitation comes from the Secretary of State, a regional council or a designated body, whatever that might be, there seems no reason whatever why the district council should not participate, whether or not the promotion is directly engaged in by the inviter or inviters. A promotion might be undertaken, for instance, by the Scottish Development Agency or by a private company or a bank, in which it would be highly appropriate for the district council to participate. Amendments Nos. 18 and 19 taken together would make it clear that that would be possible.
Amendment No. 20 deals with
industrial promotion outside the United Kingdom",
for which the clause as drafted requires
the express consent of the Secretary of State".
Amendment No. 20 merely inserts the condition phrase that the Secretary of State's consent
will not be unreasonably withheld".
We have already argued about whether the Secretary of State should be involved in this at all. I should prefer him to stay out of it altogether and leave it to the good sense of the local authorities. If he is to be involved in it at all, however, there should be some limitation on his powers, which amendment No. 20 seeks to provide.
12.15 am
I repeat that the amendments deal basically with the powers available to district authorities. Some large authorities have a considerable interest in industrial promotion, particularly in view of the current high rates of unemployment. They have been involved in it—in some cases extremely successfully—and wish to continue to be involved, but their powers are extremely restricted by the clause. We believe that they are too restricted, and the amendments are intended to give them more scope for enterprise. Given the present state of unemployment in Scotland—this is not the time to make a great speech about that—I believe that these additional powers should be granted to them.

Mr. Albert McQuarrie: I merely wish to speak to amendment No. 20, on which matter I commented in Committee in respect of industrial promotion outside the United Kingdom. As the right hon. Member for Glasgow, Craigton (Mr. Millan) has already stated, some authorities have organisations which conduct industrial promotion outside the United Kingdom. It would be unfortunate, especially in view of the point that the right hon. Gentleman has just made, if those authorities were to be inhibited from being able to proceed with the industrial promotion which has been success Ail. In this regard I can name the North-East Scotland Development Agency in the Grampian region which has contributed and continues to contribute a great deal towards the additional employment that was gained in the oil and gas industries.
As I said in Committee, the Secretary of State should not take it upon himself to be the sole arbiter of whether the local authority should conduct industrial promotion outside the United Kingdom. If, as the right hon. Gentleman has said, the Secretary of State intends to keep this in the Bill and restrict local authorities from carrying out industrial promotion outside the United Kingdom, I


would certainly commend to my hon. Friends amendment No. 20 in the name of the official Opposition which would insert the words
which will not be unreasonably withheld".
I am sure that my hon. Friends would not take exception to those few words being added. After all, at the end of the day it shows local authorities that they have the good will of the Secretary of State and the possibility of being able to proceed with what has for them been, until the Bill, a normal procedure. I commend amendment No. 20 to the Minister and I hope that he will be able to accept it.

Mr. Gregor MacKenzie: I rise briefly to support the comments of my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan), particularly those concerning inward investment. As my right hon. Friend and the Minister will know, I have long taken the view that the whole question of inward investment should be handled at the top by the Secretary of State with the Scottish Economic Planning Department and now with the Locate in Scotland Bureau. Those two organisations are well placed to do a useful job in attracting industry into the United Kingdom.
I have never been greatly impressed by some of the organisations that have gone to the United States, Sweden and elsewhere in a great blaze of publicity. In my view they have done more to give themselves publicity than to attract industry. I am not impressed by some of the missions. By the same token, I have no great desire either to see lots of local authorities wandering all over the place.
Having said that, I do not believe that at this time local authorities would want to do anything of the kind. Local authorities are just as concerned about unemployment, industrial promotion and inward investment as those of us who sit in the House and occupy the Treasury Bench. A potential investor, however, be he in America, Europe or elsewhere, will certainly want to talk to Ministers and their advisers about regional development grants, selective financial assistance and the whole range of financial incentives that are available.
The investors also want to know something of the local conditions under which they will operate. That is where the local authorities can best come into their own.
I mean no disrespect to Ministers and their advisers when I say that the local authorities have a very special role to play. I think particularly of my own city, Glasgow, where we have a very high rate of unemployment. The local councilors there would be failing in their duty if they were not to go out and let people see that Glasgow has something to offer. The manufacturers and the managers of the companies concerned want to hear about finance, but they also want to hear a great deal about the local conditions.
My right hon. Friend's amendments will help the Minister. The clause seems to have a lot of rigmarole in it, and it is obvious that much more flexibility is needed. We are dealing with individual customers and individual investors, and the approach to them needs to be made on a case by case basis. If it is felt that the Locate in Scotland Bureau should make the approach, so be it. It may well be, however, that in some cases it should be done by the district councils. The amendments will help the Minister and will not tie his hands. They will help inward investment.
For those reasons, I hope that the Minister will consider very seriously the question of allowing the local authorities, particularly the district councils, to have a much greater role in the matter than he envisages in the clause.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): My hon. Friend the Member for Renfrewshire, East (Mr. Stewart) will respond to the points made about amendment No. 21. I wish to speak about industrial promotion.
We have listened to the views of hon. Members expressed in Committee and to the various local authorities and other bodies in Scotland that are interested in industrial promotion. It is perfectly understandable, at a time of high unemployment, that everyone should want to get into the act. I do not say that in a critical way. It is understandable that local authorities, districts and regions, the North-East Scotland Development Agency, the Highlands and Islands Development Board, the Scottish Development Agency, the Scottish Council, and the five new towns, are all eager to show that they can go out and about within the United Kingdom and overseas and attract jobs to Scotland. There is nothing wrong with that. I omitted to mention the Scottish Economic Planning Department, to which reference was made, and which is the body with direct responsibility for such activities.
We have tried to ease the rather strict mechanism that the Stodart committee recommended and to recognise the role of the district council in relation to its own community, but essentially it would be a mistake to let everyone loose in these matters, particularly in regard to the overseas effort, having just established Locate in Scotland Bureau, the purpose of which is to co-ordinate the activities of the various organisations in Scotland. It is not a huge organisation taking to itself the complete function of inward investment. Its purpose essentially is to lead inward investment and, above all, to co-ordinate the activities of the various bodies that I have mentioned, including local government, which are eager to go out and about. We do this not because it brings any particular satisfaction to Ministers to introduce these clauses into the Bill, but in response to the requests that we receive from overseas.
I am sure that the right hon. Member for Glasgow, Craigton (Mr. Millan), with his experience of inward investment, will recognise that one of the complaints that Government Departments and Ministers get from overseas—I am talking now about overseas companies, quite apart from any complaints that come from our posts abroad—is that companies can be inundated with various bodies from Scotland and become confused about who is in the lead and to whom they should talk serious business when it comes to making a decision and considering the possibilities of setting up shop in Scotland.
The purpose of some of the Government amendments is to illustrate that we have moved some way towards meeting some of the points raised and have shown some flexibility, and also to underline the fact that Locate in Scotland Bureau is essentially a co-ordinating body. That is why—I say this in relation to amendment No. 20—we have provisions to enable the Secretary of State to ensure that the attracting of inward investment is a co-ordinated operation.
To state in the legislation that the Secretary of State's permission is required is in itself a co-ordinating measure.
0


It does not mean that if a particular local authority says that it wishes to go to Texas, or wherever, the Secretary of State will say "No". More likely, he will tell it that through the Locate in Scotland Bureau a visit is being arranged to several parts of the United States at a particular time. The authority, or organisation, if it joins us, will help to ensure a more co-ordinated approach, rather than one local authority going one week, and a few days or weeks later another arriving at the same company to try to sell its wares.
The Locate in Scotland Bureau is trying to achieve a coordinating function. That is the purpose of some of the amendments.

Mr. Gregor MacKenzie: I am suggesting, not that there should be a co-ordinating function by the Locate in Scotland Bureau but that the local authorities can be of assistance to the bureau. I do not want local authorities wandering all over the place getting in one another's way, or anything of the kind. I simply want them to be supported by Ministers and the Locate in Scotland Bureau.

Mr. Fletcher: I am grateful to the right hon. Gentleman. Hon. Members will see, if they inquire into these things, that when visits are made abroad the groups often include members of local authorities or officials from new towns, or from the SDA or the HIDB, in addition to people from the SEPD. Next week I hope to be at a seminar in Boston, on Scottish new towns. It has been coordinated by the Locate in Scotland Bureau. This is where the new towns have taken the initiative in a co-ordinated way, with the other bodies responsible.

Mr. Lambie: The principle of a co-ordinating body, as embodied in the Locate in Scotland Bureau, is a good concept. However, we do not know its track record. Representing, as I do, an area with the highest district unemployment rate in Great Britain, I know that the track record of the SDA and the SEPD has not been good. As far as I can see, the Locate in Scotland Bureau is just a combination of the SDA and SEPD. Unless it shows greater initiative, I should rather see my local authority, Cunninghame district council, travelling around the world, on the understanding that it might attract industry to my area. Even if it fails to attract industry, it will still be as successful as the SDA and the SEPD have been.
The Minister must give us an assurance. I have seen Secretaries of State for Industry and Secretaries of State for Scotland come and go. They come with great promises of what they will do when they visit Tokyo, Boston or any of the other places. What I want now is a guarantee that the track record of the Minister when he goes to Boston, and that of the Locate in Scotland Bureau, will be better than we have had in the past, especially with regard to my area.

Mr. Fletcher: The hon. Gentleman is correct when he says that the Locate in Scotland Bureau is essentially an amalgamation of the Scottish Economic Planning Department's activities in inward investment and the Scottish Development Agency. However, he is not correct when he says that he has not seen any evidence of success. Last year there were several major investments in Scotland as a direct result of the activities of those bodies. The Motorola investment in East Kilbride was substantial.

There was also the Nippon Electric investment in Livingston. Those are just two. A number of others in Scotland are a direct result of those efforts.
I know that the hon. Gentleman believes that we should do better in his district, and I do not dispute that. but A is not because we have failed to introduce companies to his district. It is because, as I am sure he realises, the decision about the final location in Scotland must rest with the company. We do our best to steer them to particular parts of the country, but the final location is the choice of the company.
Amendment No. 14 deals with a slightly different matter, but it is related, in that it considers the powers of districts. It provides, on the one hand, that districts may promote only their own sites and premises, and, on the other, that they may promote anything else in their areas that could be regarded as being of industrial significance—in short, anyone else's sites, developments or services.
The Bill is about co-ordination of effort and the avoidance of wasteful duplication. Given the aspirations of some district councils—always with the best will in the world, but not necessarily helpful to the overall intentions—it would be surprising if a few did not resent having to work through regions, particularly where the political complexions differ.
However, as well as their other functions, regions are responsible for strategic planning and the provision of basic infrastructure. Their view is, therefore, wider than that of districts, and we decided that the wider promotional activities should be for regions and that districts should concentrate on promoting what they themselves owned. That is in line with the reactions to the Stodart report, which emphasised the local role of districts, although it went on to recommend that all powers should be concentrated in the regions. However, we did not accept that view, and our proposals instead recognise an important and continuing role for the district, while making it clear that they cannot go their own way without regard to the activities of other bodies. We therefore recommend that the House reject amendment No. 14.
Amendment No. 15 seeks to allow district councils to mount or take part in investment missions, exhibitions and symposiums in the United Kingdom promoting their own sites or premises. It cuts across what the clause is trying to achieve, because it cuts across the majority opinion expressed following the Stodart report, and it cuts across the interests of the regions.
The Bill is designed to achieve a sensible and rational approach to industrial promotion. While we accept that districts have a valuable contribution to make towards encouraging local employment opportunities, this is essentially a supporting, rather than a leading role. Under our proposals, districts still have an important but defined task in industrial promotion. Within their own areas they may promote as they wish. Outwith their districts they will be able to take part in promotions along with, for example, their regional council. That seems to be a sensible and much needed rationalisation of what so far has been a confused and difficult field with too many bodies in the same field, often in direct competition with one another.
Government amendment No. 16 makes it clear that when reference is made to a regional council for the purposes of this part of the Bill, it means the regional council within which the district is contained. It is designed to avoid the ludicrous situation where a district


in one region could seek or accept an invitation from another region to join in some promotional scheme which could possibly be at variance with its own region's industrial strategy. We think that this is a sensible arrangement, and I hope that the House will support it.
Amendment No. 17, as right hon. and hon. Members will recall, results from our having given an undertaking in Committee to look again at the procedures to be adopted by the Secretary of State in designating bodies for the purpose of subsection (3)(c). We have looked again at the method to be used, and, as was said in Committee, we are not rigid on the matter. As a demonstration of our usual good faith we propose that the designation of a body will be on a more formal and public basis, by order.
I am sorry that we cannot accept amendments Nos. 18 and 19. We have doubts about the drafting. We gave an undertaking in Committee to look again at whether an agreement rather than physical joint partnership should be the test for districts engaging in a wider sphere of industrial promotion. We have done so, and concluded that the participation of the inviter is essential if we are to achieve the co-ordinated approach to promotion that is generally acknowledged to be necessary and desirable. To make mere acquiescence rather than partnership the criterion is to make nonsense of the provisions in the clause which limit the powers of districts in industrial promotion.
If a district "arranged" to receive an invitation from its regional council to embark on industrial promotion exercises unrelated to its own sites or premises, it would be able to do so without the region taking any part in the venture. Some districts would never be able to make such an arrangement, while a neighbouring district might get an automatic invitation.
The main objection to the proposal is that it wedges open the present door and perpetuates the existing waste of resources. If 10 districts decided to mount their own promotional campaigns and all received invitations, under the amendments 10 delegations would troop off to sell their own or anyone's wares throughout the length and breadth of the United Kingdom. Worse still, what would happen if they all decided to be represented at the same exhibition? We should end up with 10 stalls all clamouring for attention. One exhibit mounted and co-ordinated by the region would be much better value for money and would almost certainly be much more effective. That is why we have the arrangement proposed in the Bill.
I have already referred to amendment No. 20. In response to the comments of the right hon. Members for Craigton and for Rutherglen (Mr. MacKenzie), and of my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), I emphasise that the Locate in Scotland Bureau is essentially a co-ordinating body. My right hon. Friend the Secretary of State has said on many occasions that he will use a light hand in deciding whether to agree to these various organisations going abroad. I repeat that it is for the purposes of co-ordination that that item should remain part of the Bill.

Mr. Allan Stewart: Perhaps I might respond briefly to the points made by the right hon. Member for Glasgow, Craigton (Mr. Millan) on amendment No. 21 and thank him for his response to Government amendment No. 118. Regional authorities can contribute to district authorities' expenditure on the countryside under the 1967 Act.
Regional authorities can be represented on any body set up to manage countryside projects under section 57 of the Local Government (Scotland) Act 1973.

Mr. Dewar: If the matter is complicated, perhaps I can write to the Minister. For example, two district councils and two regional councils co-operate closely in the management of Loch Lomond. Is it clear that that cooperation can continue under the Bill as drafted?

Mr. Stewart: I am happy to assure the hon. Gentleman that the short answer is "Yes".

Mr. Canavan: The chairperson of the Countryside Commission for Scotland is on record as calling for new legislation to set up a new kind of national parks authority in Scotland. I do not know whether that is indicative of a lack of co-ordination between Strathclyde regional council, Central regional council, Dunbarton district council and Stirling district council over the situation in Loch Lomond side. As the Minister knows, I have a constituency interest, because practically the whole of the east bank of Loch Lomond lies within my constituency.
I thought that the local authorities involved were coordinating reasonably well. Of course, other public bodies, such as the Forestry Commission, are concerned. It has done a reasonable job in trying to provide as much access as possible to the countryside in that area. It is one of the most scenic areas not only in Scotland but in the world. Various authorities have made efforts to open it up.
Amendment No. 21 refers specifically to co-ordination between local authorities on matters referring to the countryside. Have the Government any view about the recent suggestion by the chairperson of the Countryside Commission that new legislation is desirable? If so, is it in the pipeline? That obviously bears on the points made earlier.

Mr. Allan Stewart: We are in touch with the Countryside Commission and we always consider its views carefully. However, the key point is that there are at present sufficient powers to enable a continuing involvement of the two regional authorities in the proposals for the Loch Lomond area.

Amendment agreed to.

Clause 6

FUNCTIONS OF LOCAL AUTHORITY IN RELATION TO INDUSTRIAL PROMOTION

Amendments made: No. 119, in page 5, line 30, leave out `No' and insert
`without prejudice to any power which they may have under section 90 of this Act, no'.

No. 16, in page 6, leave out line 10 and insert—
 '(ii) the regional council within whose area the area of the district council is; or'.

No. 17, in page 6, line 11, after 'designated', insert ', by order.'

No. 120, in page 6, line 28, leave out from '1975' to `; and' in line 31.—[Mr. Allan Stewart.]

Clause 9

ISLANDS OR DISTRICT COUNCIL'S FUNCTIONS IN RELATION TO TOURISM

The Under-Secretary of State for Scotland (Mr. John MacKay): I beg to move amendment No. 22, in page 8, line 14, at end insert
'(ia) for the words "A local authority" there shall be substituted the words "An islands or district council";' .

Mr. Deputy Speaker: With this, it will be convenient to take the following amendments: No. 23, in page 8, leave out lines 18 to 26.
No. 24, in page 8, line 24, leave out from 'State' to end of line 26.
And Government amendments Nos. 25 to 28.

Mr. MacKay: The principle underlying clause 9(1) as originally drafted was that local authorities should have responsibility for tourism and that that responsibility should be concentrated at district and island level. Through a misunderstanding at the Committee stage, an amendment to delete paragraph (a)(i)and thus to maintain concurrence was accepted. However, I am sure that those who were present in Committee that day will agree that that was not the intention of the Committee or of the debate.
Tourism is an industry that affects local economies and employment opportunities. Clause 9 is drafted on the principle that the legislation must work with, not against, the tourist industry and that we must take into account the commercial and economic factors in that industry. We believe, as the Stodart committee believed, that the concentration of local authority responsibility for tourism at district or island level would firmly establish the fact that tourist services should be planned at that level.
The concurrency of responsibility that has existed to date has led to much wasteful duplication of effort between region and district. With the removal of concurrent responsibilities for tourism, the existing overlap of function and duplication of effort that are wasteful of resources will cease and we believe that a more effective local service to clients will result. This will provide an opportunity for public authorities and the tourist trade to pool their resources and initiatives in this area and reflect the market opportunities that are available to them. I commend this amendment to the House.
12.45 am
As to Government amendments Nos. 25 to 28, hon. Members will recall that we discussed the matter of defining a "person" in some detail. I have decided to accept the argument that we should make this part of the legislation parallel with section 90 of the Local Government (Scotland) Act 1973 and refer not just to "person" but to "person or body". I am sure that the amendments will commend themselves to those hon. Members who pressed them in Committee.

Mr. O' Neill: I do not wish at this late stage to quarrel with the Under-Secretary, especially as he has been waiting for some time to participate in the debate. However, it is somewhat less than truthful to say that the mood of the Committee when we discussed this matter was one of complete acceptance of the Government's position. Since the reverses that the Government suffered in Committee, there has been a reappraisal of the position

and perhaps in later amendments we shall see evidence of wiser counsel being brought to bear than their somewhat bureaucratic initial approach.
The idea embodied in amendment No. 22 is that a body should be set up to work with the tourist industry's interests. We have been anxious throughout the consideration of this clause to point out that it means that some of the responsibility for tourism as a result of the end of concurrency will be vested in non-elected bodies. Although it is all very well for the Minister to say that the involvement of the tourist industry will provide a better service, our initial consideration was that it would take away from publicly elected representatives the responsibility for some aspects of the promotion of tourism.
It is fair to say that, since the Committee stage, there has been fairly strong lobbying by groups such as the Scottish Tourist Board. It is equally fair to say that, although many Labour Members had strong misgivings about the bureaucratic structures that were suggested, our fears have been allayed by the representations of the tourist board. We view the matter with much more equanimity than we did to start with.
Amendments Nos. 23 and 24 would have the effect of allowing whatever bodies are responsible for the promotion of tourism to have more independence of the Secretary of State and would allow promotions to take place abroad without the express permission of the Secretary of State. We feel that it is an interference in the legitimate activities of the tourist organisations to be prevented in that way or to be answerable to the Secretary of State.
We recognise that, since the debacle of the Committee stage, there has been some reconsideration. In some areas, as we shall discover in a later amendment, the Secretary of State has withdrawn from the centre of the stage. Amendments Nos. 23 and 24 would give further impetus to the removal of the Secretary of State from the centre of activities. It should be up to local authorities or the tourist bodies to have the opportunity to enter into promotions without the permission of the Secretary of State.
I appreciate that the amendments that the Minister has made to bring the legislation into line with section 9) of the 1973 Act are all drafting amendments, so I shall not deal with them.
I am anxious for the Minister to explain why he thinks that tourist bodies should not be able to participate in promotions abroad without the express permission of the Secretary of State. Why is he not prepared to allow them to undertake promotion work abroad without going through the Scottish Office?

Mr. John MacKay: Before the new bodies and the coordinating body are set up it would be wrong for district councils to go abroad on their own account and without co-ordination to promote Scotland overseas. That is incompatible with our policy to promote Scotland as a whole. When we set up the area tourist organisations throughout Scotland, and the co-ordinating council, the Secretary of State will give powers to that body to decide on overseas promotion. Amendment No. 24 seeks to do the contrary. The Government's argument is roughly the same as the Opposition's. Before the bodies are set up the Secretary of State must retain powers to sanction overseas promotion. I hope that the House will reject the Opposition's amendments.

Amendment agreed to.

Amendments made

No. 25, in page 8, line 31 after 'doing', insert
'(or body in their doing)'

No. 26, in page 8, line 35 after 'person', insert
'(or body)'

No. 27, in page 8, line 40 after 'doing', insert
'(or body in their doing)'

No. 28, in page 8, line 42 leave out 'they' and insert 'that council'.—[Mr. john Mackay]

Mr. John Mackay: I beg to move amendment No. 29, in page 9, line 3, leave out from beginning to end of line 25 and insert—
'Schemes involving collaboration in the promotion of tourism.
90A. After consultation with the Scottish Tourist Board, islands and district councils may prepare (or arrange for the preparation of) schemes, in which they may participate, providing for—
(a)the forming of organisations of such persons as carry on, or have powers or duties as regards, or appear to the councils (or the person preparing the scheme) to have an interest in, activities which relate to tourism; and
(b)the composition and functions of such organisations.".'.
We debated this issue at length in Committee. In response to reservations in Committee and from other bodies such as CoSLA, the Government agreed to review the matter. We return with a provision which is based on the amendment suggested by CoSLA. It is designed to make it clear that district and island councils are enabled, but not compelled, to draw up in consultation with the Scottish Tourist Board, proposals for the joint organisation and management of tourism.
I hope that that goes most of the way, if not all of the way, to meet objections expressed by the Opposition and some of my hon. Friends to the original provision. The amendment will encourage voluntary partnership between local authorities, the tourist trade and the STB, and will provide the best foundation for the trade in Scotland. It will take away the element of compulsion which the Committee and outside interests did not like.

Sir Hector Monro: I am glad that the Minister made those remarks. On Second Reading hon. Members criticised the emphasis being removed from the regions and being put on to the districts. There was no clarity about the way in which the new organisations would be set up. The Minister's words pave the way to setting up the new area tourist organisations which, in some parts of Scotland, are already in being, sometimes under different names.
I understand that there will be complete flexibility between regions, districts and voluntary organisations and that organisations such as the Dumfries and Galloway tourist association, an independent body supported by the regions, the districts and the STB, will continue much as at present.
I am still concerned about the emphasis given to the districts for internal, local arrangements. I believe that they could manage to deal with tourist promotion. But when we turn to the mounting of exhibitions further afield in London or elsewhere, in collaboration with other major exhibitions promoting tourism, perhaps a regional input is far more satisfactory. The name Dumfries and Galloway is well known throughout the United Kingdom, yet the individual district names are probably not so well known. What the Minister has said will be acceptable because it apparently gives total flexibility. It is up to the regions, the

districts and the independent voluntary organisations to do what they like. We hope that they get together to promote tourism effectively in Scotland.

Mr. McQuarrie: I congratulate the Government on having the good sense to change section 90A. The wording of section 90A in the original Bill was in some ways dictatorial. It could be that the Secretary of State had the intention to exercise these powers only if he felt that some of the local authorities were not carrying out the voluntary establishment of the area tourist offices. But the wording of the amendment removes the power from the Secretary of State in line with the Government's policy. It also ensures that the area tourist organisation system throughout Scotland and the islands and district councils can prepare the organisation and participate in area tourist organisation.
I notice also that the amendment indicates a recognition of the Scottish Tourist Board and its co-ordinating and advisory role. I am pleased that there is nothing in the amendment which would compel local authorities to follow any course of action which may be suggested by the Scottish Tourist Board. Therefore, I am delighted that the Government have seen fit in the recent public expenditure White Paper substantially to increase the funds available to the Scottish Tourist Board to allow it to assist financially in the setting of these area tourist offices.
The sum of £600,000 extra for this purpose has been added to the board's allocation for the next three years. I am confident that that will encourage local authorities and other outside organisations to set up the tourist organisation structure which would be required. It means that we get it on a voluntary basis rather than through the somewhat dictatorial powers that were being requested in Committee. I am delighted that the Government have seen fit to alter the clause. I fully support the change.

Mr. O'Neill: We are glad that the Government have decided to think again. We are happy that the Secretary of State's power has been removed and that the reserve power no longer exists.
How confident is the Minister, given the new flexibility, that the Scottish Tourist Board will get the response that it wants from the local authorities? Is there any evidence of any local authority reluctance to participate or is the scheme going ahead at full pelt? Can we assume that there will be a system of area tourist organisations ready to take off next April if the Bill is enacted. The system of area tourist organisations will come into effect on 1 April 1983. What is the present position?

Mr. Maclennan: What is the Minister's understanding of how the concordat which operates between the Highlands and Islands Development Board and the Scottish Tourist Board with respect to the setting up of area organisations in the Highlands and Islands, will work? Has the Highlands and Islands Development Board been consulted about the clause? If not, perhaps the Government would care to examine this matter before the Bill goes to another place as there might be some need to bear that in mind before reaching a conclusion.

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Mr. John MacKay: In answer to my hon. Friend the Member for Dumfries (Sir H. Monro), exhibitions in the United Kingdom will be up to any amalgam of area tourist


organisations and councils that wish to mount them. I am sure that they will do so on the basis that my hon. Friend suggested.
I am pleased that my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) is satisfied with the clause as it will be amended. He took an active part in Committee in criticising the original drafting. I noted his remarks about the money that we are giving to the Scottish Tourist Board to set up the new area tourist organisations.
The hon. Member for Clackmannan and East Stirling-shire (Mr. O'Neill) asked whether I was confident that the Scottish Tourist Board would receive an adequate response. In the area of the Highlands and Islands Development Board the local authorities have been extremely co-operative with the trade and the board over the years. We have no reason to believe that that co-operation will not be forthcoming elsewhere in Scotland, especially given the example that the other parts of Scotland have before them of the successful way in which tourism has operated in the Highlands as a joint venture between the board, the local authority and the trade. I am hesitant to give the promise that all the ATOs will be set up by next April. The areas with high tourist demands will get the scheme off the ground the soonest. We shall want, as will the board, to proceed quickly. The money that we shall provide will be spread over three years. I do not expect all the ATOs to be set up by next April.

Mr. O'Neill: Is the hon. Gentleman confident that he will get the co-operation of Edinburgh district council? At present it seems somewhat reluctant to participate. Has any change of heart been recorded by that authority?

Mr. MacKay: I should not like to pre-judge that issue. Tourism is extremely important to Edinburgh and I am sure that the district council will recognise the advantages in area tourist organisations co-operating between themselves and with the trade. We hope and expect the council to act responsibly.
As I have said, the example that we are using for the rest of Scotland is from the Highlands and Islands Development Board. I am sure that the board has been consulted. The hon. Member for Caithness and Sutherland (Mr. Maclennan) will know that one of those who has been involved in tourism in the Highlands has moved to the STB and is the person on whom we think we can rely to get the scheme off the ground. I am sure that the co-operation between the two boards will continue.

Amendment agreed to.

Clause 12

ISLANDS OR DISTRICT COUNCIL'S DUTIES IN RELATION TO THE PROVISION OF RECREATIONAL, SPORTING, CULTURAL AND SOCIAL FACILITIES AND ACTIVITIES.

Amendment made: No. 32, in page 10, line 36, leave out `section 13, 14 or 15' and insert 'sections 13 to 15'.—[Mr. Alexander Fletcher.]

Clause 13

ISLANDS OR DISTRICT COUNCIL'S POWERS IN RELATION TO THE PROVISION OF RECREATIONAL, SPORTING, CULTURAL AND SOCIAL. FACILITIES AND ACTIVIT [ES

Amendment made: No. 33, in page 11, line 4, leave out subsections (3) and (4).—[Mr. Alexander Fletcher.]

Clause 14

PROVISIONS SUPPLEMENTARY TO SECTION 13

Amendments made: No. 34, in page 11, line 27, after
`may', insert
`,for the purposes of their functions under subsection (2) of that section'.

No. 35, in page 11, line 43, leave out from 'use' to 'for'
in line 44.

No. 36, in page 12, line 1, leave out from 'promoted,'
to end of line 2 and insert
`by them any facility (or any part thereof) provided by them under the said section 13;'.

No. 37, in page 12, line 3, after `to', insert
`any facility provided by them under the said section 13 or for admission to'.

No. 38, in page 12, line 6, at end insert—
'(f) accept the right to manage and control a park devoted or partly devoted to public use from the owner of that park or from any other person entitled to transmit that right;
(g) enter into an agreement with the owner of any park or with any other person whereby—

(i) access to the park for the public is obtained or enhanced; or
(ii) provision is made for management and control of the park by the council.
(h) let as a shop, stall or restaurant a building in a park under their management and control;
(i) set apart some of any such park for any purpose which they consider appropriate having regard to their functions under the foregoing provisions of this section and under the said section 13;
(j) do anything necessary to defend a public right in any park; or
(k) conduct either by themselves or in collaboration with a voluntary organisation or other person, a competition in connection with a sporting or recreational activity; and with regard to that competition—

(i) paragraph (e) above shall apply as it applies to any such entertainment or activity as is mentioned in paragraph (d) above; and
(ii) the council may provide trophies and prizes.'.

No. 39, in page 12, leave out from beginning of line
7 to 'islands' in line 13 and insert—
'(2) Without prejudice to their generality of the powers under section 13 of this Act, an'.

No. 40, in page 12, line 15' after 'incurred,', insert
`as regards recreational, sporting, cultural or social facilities or activities,'.

No. 117, in page 12, line 15' after 'organisation', insert
`or other person, not being a local authority,'

No. 41, in page 12, line 16' leave out from
'maintaining' to the end of line 18 and insert
`such facilities (or, as the case may be, in providing or promoting such activities) if the council have power themselves, under the said section 13 or under the foregoing provisions of this section, to provide such facilities or activities;'.

No. 42, in page 12, line 21' after 'facility', insert:
`or in providing or promoting any such activity'.

No. 43, in page 12, line 24' after 'maintaining', insert
', managing'.

No. 44, in page 12, line 27' leave out 'and' and insert 
`or'.

No. 45, in page 12, line 31' leave out subsection (4).—[Mr. Alexander Fletcher.]

Clause 15

BYELAWS IN RELATION TO RECREATIONAL, SPORTING, CULTURAL AND SOCIAL ACTIVITIES

Amendments made: No. 46, in page 13, line 6, leave out 'section 13' and insert 'sections 13 and 14'.—[Mr. Alexander Fletcher.]

Mr. Alexander Fletcher: I beg to move amendment No. 47, in page 13, line 12, leave out 'may be'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 48 to 50.

Mr. Fletcher: The amendments meet drafting criticisms that were made in Committee.

Amendment agreed to.

Amendments made: No. 48, in page 13, line 12, leave out from 'the' to 'appropriately' in line 13 and insert
`facility by a person who is an officer of, and'.

No. 49, in page 13, line 13, leave out 'and'.

No. 50, in page 13, line 19, leave out 'facilities' and insert ' facility'.

No. 51, in page 13, line 34, leave out
`facilities, Land or premises are'
and insert
`facility or land is, or the premises are,'.-[Mr. Alexander Fletcher.]

Clause 16

INTERPRETATION OF AND SAVINGS IN RELATION TO SECTIONS 12 TO 15

Amendments made: No. 52, in page 14, line 9, after `enactment', insert`—
(a)'.

No. 53, in page 14, line 10, at end insert
'; or
(b) whereby a facility is open to the public free of charge.'.—[Mr. Alexander Fletcher.]

Clause 17

POWER OF DISTRICT COUNCIL TO ACQUIRE A HARBOUR WHICH IS USED WHOLLY FOR SPORTING OR RECREATIONAL PURPOSES

Mr. Alexander Fletcher: I beg to move amendment No. 54, in page 14, line 19, leave out 'harbour which' and insert—

(a) harbour;
(b) pier;
(c) boatslip; or
(d) jetty,
which'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 55, 129, and 121 to 123.

Mr. Fletcher: The amendments clarify the meaning to "harbour" in the clause and extend the exclusion of harbours from the transfer of property provisions in clause 31.

Amendment agreed to.

Amendment made: No. 55, in page 14, line 24, after `harbour', insert
', pier, boatslip or, as the case may be, jetty'-[Mr. Alexander Fletcher.]

Clause 19

RE-ALLOCATION OF RESPONSIBILITY FOR THE ENFORCEMENT OF CERTAIN PROVISIONS OF THE FOOD AND DRUGS (SCOTLAND) ACT 1956

Mr. McQuarrie: I beg to move amendment No. 56, in page 16, line 1, leave out from beginning to end of line 10 on page 17.

Mr. Deputy Speaker: With this we can also discuss amendment No. 57, in page 16, line 1, leave out from beginning to 'after' in line 14 and insert
`In the Food and Drugs (Scotland) Act 1956'.

Mr. McQuarrie: The amendment seeks to remove clause 19 from the Bill. It is put forward because of the representations I and other hon. Members have received from many representatives in the food and consumer industries. The Scottish Consumer Council, which represents general consumers, has made it clear that it has no direct interest in which group of local authority officers enforce the legislation on food standards, composition and labelling. Its overriding concern is that this legislation and other consumer protection legislation should be enforced in the most effective and efficient way.
During the period in which the clause was debated in Committee there was no evidence of discontent from consumers or traders with the present arrangements. The debate brought out the fact that the enforcement of the legislation of food standards, labelling and composition is more in line with trading standard matters than it is with public health. Scottish trading standards officers have a great deal of experience and expertise in those fields and the work fits in well with the enforcement of other consumer protection measures, such as weights and measures and trade descriptions.
It was also clear in Committee, and from the evidence available, that the trading standards departments generally have a higher sampling rate than the environmental health departments. That is sufficient proof that the trading standards departments, which are under the control of the regional councils, are in a position to enforce that part of the legislation more diligently.
I am sure that the House accepts that it is important for the consumer and the trader that there should be uniform interpretation of the legislation. If the amendment is not acceptable to the Government the district authorities and their officers will use their best endeavors to co-ordinate and ensure uniformity of enforcement. The strength of the argument put forward by the many organisations that are opposed to this clause illustrates their concern that it will be improbable that the 56 authorities will be able to ensure the consistency of performance as well as the present 12 regional authorities.
The ratepayers who have to foot the bill for increased costs if the clause is included in the Bill are concerned that the transfer of those functions from the regional to the district authorities will not lead to any reduction of staff at regional level.
The addition of those functions to the work load of the environmental health officers can lead only to an increase in staff and local authority expenditure. Not only is that contrary to Government's policy but it will place greater strain upon the district authorities if they are to keep within the guidelines that the Secretary of State for Scotland sets year by year.
The clause has been put into the Bill on the basis of the statements made in chapter 13 of the Stodart report. In paragraph 157 it was quite clearly stated that those who were concerned with food standards, labelling and composition were seen as being closely connected with consumer protection and the best suited for regional councils. In later paragraphs the report sets outs its reasons for recommending the changes as proposed in clause No. 19. Throughout the paragraphs an element of doubt quite frequently arises about the demarcation lines between regional and district authorities and there is mention of how often they intertwine with enforcement of legislation under the Food and Drugs Acts.
It is also worth drawing the attention of the House to the comments of the Society of Scottish Directors of Consumer Protection, which pointed out that the EEC is harmonising legislation on trading standards and practices, which requires a uniform approach and interpretation that is more easily met by the present number of regional and island authorities in Scotland.
Paragraph 172 of the Stodart report accepts that consumer protection would be more costly to operate at district level than at regional level and the report recommended that it should be left with regions and island councils. If such an important service is seen to be more cost effective at regional level, surely that makes the case that there should be no change in the operation of food standards, labelling and composition by the regional and islands councils, the staff of which aready carry out those functions. If no change is made, there will be no increase in staff and no increased cost to the ratepayers.
It is right that the House should be aware of the comments of the Institute of Trading Standards Administration in a letter to my hon. Friend the Under-Secretary on 8 April 1982, which set out specific reasons for the removal of the clause from the Bill. The institute said that the weight of the argument in Committee strongly favoured the deletion of the clause, It still supports that view, as does the Food Manufacturers Federation, which has written to me of its deep concern that, despite the Under-Secretary's assurances on Committee that he would have a serious look at the clause, nothing has altered.
There is no real balance in the clause, as was brought out in Committee and accepted by the Under-Secretary when he said that he would look carefully at the points made by hon. Members and would consider any new points from the many organisations that were opposed to the clause and made representations to him after considering the Committee's proceedings. However, despite having been sent further representations from those organisations, the Minister has seen fit to bring the clause to the House as it stood in Committee.
Representations were made by the Scottish Institute of Environmental Health in a letter dated 26 March 1982, which was circulated to right hon. and hon. Members. The letter related to a meeting of the institute's education and general purposes committee, which considered our Committee's deliberations on the clause. The institute said that the clause mainly transfers to district authorities the

responsibility for the enforcement of sections, 1, 2, 6 and 18 of the 1956 Act. The letter does not say that the clause is based on the 1973 Act, which made regional councils responsible for the provisions in the Food and Drugs (Scotland) Act 1956, which dealt with food standards, labelling and composition.
It was also wrong of the institute to suggest that environmental health departments had administered 1 hose functions for 19 years. Cities and large boroughs may have carried out some of the functions before the reorganisation of local government, but they were but a few of the functions that were divided up between regional and district councils on the reorganisation of local government. The institute cannot claim that the clause is a reversion to a former practice.
I welcome the comment in the institute's letter that soundings that it has taken from directors of environmental health in Scotland suggest that there will be no increase in staff levels, and I hope that the Minister will beat that in mind when he starts to receive complaints from district authorities that they are understaffed because of the addition of the functions that will be delegated to them if the clause is passed. The institute naturally has a vested interest in the clause. I do not blame it for that. If my amendment does not receive the approval of the House, I shall watch with interest how the district authorities carry out the additional functions. I wish to make it quite clear that the amendment is not a personal attack on the districts or the institute. I am certain that the institute is reasonable enough to accept that a Member of Parliament must make up his mind and express an opinion.
I am certain that the institute is reasonable enough to accept that a Member of Parliament must make a stand on an issue if he believes that what is proposed is detrimental to his constituents. I am proud to be an honorary vice-president of the institute. I am sure that it appreciates that I have not tabled my amendment without the deepest thought and consideration,
1.15 am
I oppose the clause because it is badly drafted, it is a waste of the expertise of the regional offices, the functions of which will be dramatically reduced, and it has not had the consideration of the Minister which it should have had after the many representations that were made against it by all the organisations, all with the best interests of ratepayers, consumers and traders as their first priority. I appeal to the Minister to accept the amendment and to remove the clause.

Mr. Robert Maclennan (Caithness and Sutherland): I support the hon. Member for Aberdeenshire, East (Mr. McQuarrie). He made a most helpful and sensible speech. It will command widespread support from those who take an interest in consumer protection in Scotland. He has deployed the arguments with force and clarity, although not brevity. I merely wish to show that if he chooses to divide the House on the issue, he will have my full support.

Mr. Dewar: I, too, was impressed by the efforts of the hon. Member for Aberdeenshire, East (Mr. McQuarrie). He made a similarly trenchant speech in Committee. Unfortunately, on that occasion he rather spoiled it by voting with the Ministers.

Mr. McQuarrie: I abstained.

Mr. Dewar: I knew there was a touch of bathos at the end.
This is an important matter. We have been lobbied extremely heavily. I do not deplore lobbying. It shows a genuine strength of feeling. There is no doubt that many organisations believe that the Government have the balance wrong. There is no way in which we can achieve a satisfactory split. There is an overlap and those who accept the recommendation that we should try to have neat boundaries between regions and districts will be disappointed. The regions' consumer protection interests are set against the environmental health responsibilities of the district councils. Whichever way we go, there will be an overlap in relation to the food and drugs legislation.
I have given much thought to the matter. The balance of convenience and argument is in favour of removing clause 19, and leaving the position as it is, with food standards, composition and labelling remaining the responsibility of the consumer protection departments of the regional authorities. I do not want to go into detail about why recommendation 46 of Stodart was wrong, but it would be unfortunate if the number of enforcement authorities increased from about one dozen to a little more than 60. There would be diseconomies of scale or fragmentation would bring inefficiencies.
There would be difficulties for the retail trade, which would have to consult two authorities instead of only one. There would be clear disadvantages in terms of local authority co-ordination. I know that a formidable number of bodies interested in this have made representations to that effect, including the Retail Consortium, the CBI, the Food and Drinks Industries Council, the Food Manufacturers Federation and the Scottish Consumer Association as well as the obvious consumer protection interests in the regional councils.
I recognise that it is a difficult matter of balance and judgment, but I believe that the Government should rethink this matter. It was in that spirit that the amendments were tabled. Amendments Nos. 56 and 57 as drafted might well leave unpleasant ends and jagged edges in the Bill and might leave the public analyst in a strange state of limbo. I am prepared to accept that there may be substantial technical difficulties with both amendments, but the Bill will no doubt be debated again when it reaches another place.
Therefore, I hope that the Minister can give some indication beyond a rather formal, pat cliché about listening to what has been said and giving some kind of consideration to it at some indefinite time in some indefinite way. Perhaps he will say a little more to suggest that he is prepared to look again at this with a view to changing his mind, as I believe that the great weight of the argument demands.

Mr. John MacKay: As the hon. Member for Glasgow, Garscadden (Mr. Dewar) has said, the clause implements the recommendations of the Stodart Committee that the powers of the Food and Drugs (Scotland) Act 1956 dealing with
food standards, composition and labelling
should be transferred from the regional councils to the district councils. The report states in paragraph 158 that
Many district councils in their evidence have represented that this
—the overlap—
is an unsatisfactory state of affairs.

The issue is finely balanced. After a long and informed debate, the Standing Committee decided that the clause should stand. Environmental health officers in the district council are already heavily engaged in important matters of food law—for example, imported food regulations and hygiene regulations—and have a co-ordinated approach on those matters. I see no reason to doubt that they would do the same if they were given the powers proposed in the clause.
The Under-Secretary of State, my hon. Friend the Member for Renfrewshire, East (Mr. Stewart), and I undertook to consider new evidence presented before this stage of the Bill. He and I met the CBI, and my officials met the Scottish Consumers Council, the Retail Consortium and the Food Manufacturers Federation. Their worries, like those of my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), are very genuine and we have promised to monitor closely the way in which the matter develops in the early periods of the changeover, but they did not convince us that their apprehensions about the effect on the industry were justified.
The main thrust of the 1956 Act is to ensure that food is safe to eat. None of the region's statutory duties under other Acts seems to have the same substantial health overtones as the duties under the 1956 Act. They are for the most part concerned with the protecting the public from fraud, deception, short weight and the like. The Stodart committee clearly felt that the health implications of the regions' duties under the 1956 Act set them firmly apart from those other consumer protection duties to the point at which they were more appropriate to an environmental health department, whose officers already deal with unfit food, food hygiene and imported food regulations—in effect, with all aspects other than food standards and labelling. The transfer would restore the position to that prior to reorganisation.
I should tell my hon. Friend the Member for Aberdeenshire, East that the directors of environmental health said that, given the work done on food by their departments, they see no substantial staffing implications, and the district councils themselves have made it clear to us that they see no need to increase their staffs.
As I have said, we have considered the matter in some detail. The debate in Committee was lengthy. It was decided that we should stay with the Stodart committee's proposals. I suggest to the House that we do the same tonight and reject the two amendments.

Amendment negatived.

Clause 22

ISLANDS OR DISTRICT COUNCIL'S FUNCTIONS IN RELATION TO STREET CLEANSING

Amendment made: No. 66, in page 18, line 4, after "'cleansing"', insert
'means such cleansing as appears to the islands, or as the case may be district, council to be necessary in the interests of public health or safety or of the amenities of their area but'.—[Mr. Allan Stewart.]

Clause 31

CONSEQUENTIAL TRANSFER OF PROPERTY OF LOCAL AUTHORITIES

Amendments made: No. 129 in page 22, line 6, after `below', insert `and to subsection (6) below'.

No. 121, in page 22, line 8, leave out
or which constitutes or forms part of a harbour'.

No. 122, in page 23, line 25, leave out 'and' and insert
'which does not constitute or form part of a harbour and it.

No. 123, in page 23, line 26, leave out 'property' and 
insert
'such property; in the foregoing provisions of this subsection "harbour" means anything mentioned in paragraphs (a) to (d) of section 154 (3A) of the 1973 Act'.—[Mr. Allan Stewart.]

Clause 46

IMPROVEMENT GRANTS FOR THE DISABLED

Amendment made: No. 74 in page 31, line 10., leave out 'by the owner of and insert 'in relation to'.—[Mr. Allan Stewart.]

Clause 47

POWER OF LANDS TRIBUNAL IN RELATION TO CERTAIN FAILURES BY PUBLIC SECTOR LANDLORD

Amendments made: No. 77, in page 31, line 26, leave 
out 'subsection (3) of'

No. 78, in page 31, line 32, leave out from `(a)' to end
of line 42 and insert—
'in subsection (2)—

(i) in paragraph (a) after the word "sell" there shall be inserted the words "(even if only such offer to sell as is mentioned in paragraph (d) below)"; and
(ii) after paragraph (c) there shall be inserted the following paragraph—
; or
(d) where a landlord has served an offer to sell whose contents do not conform with the requirements of paragraphs (a) to (e) of section 2(2) of this Act (or where such contents were not obtained in accordance with the provisions specified in those paragraphs)"; and

(b) for subsection (3) there shall be substituted the following subsectio—
(3) Where a matter has been referred to the Lands Tribunal for Scotland under subsection (2) above the Tribunal shall consider whether in its opinion—

(a) any of paragraphs (a) to (c) of that subsection apply, and if it so finds it may—

(i) give any consent, exercise any discretion or do anything which the landlord may give, exercise or as the case may be do under or for the purposes of this Part of this Act; and
 (ii) issue such notices and undertake such other steps as may be required to complete the procedure provided for in section 2 of this Act;
and any consent given, any discretion exercised or anything done under the foregoing provisions of this subsection shall have effect as if it had been duly given, exercised or as the case may be done by the landlord; or

(b)paragraph (d) of that subsection applies, and if it so finds it may order the landlord to serve on the tenant an offer to sell, in proper form, under section 2(2) of this Act within such time (not exceeding two months) as it may specify.".'.

No. 81, in page 32, line 1, leave out from 'above' to
end of line 3 and insert—
'and by paragraphs 34A and 34B of Schedule 3 to this Act shall have no effect as regards any case where, at the date of coming into operation of this section of this Act, the Lands Tribunal for Scotland has either—


(a) determined, after consideration under subsection (3) of the said section 7, that none of paragraphs (a) to (c) of subsection (2) of that section apply to that case; or
(b) issued an offer to sell under the said subsection (3):.—[Mr. Allan Stewart.]

Clause 48

MAINTENANCE OF SEWAGE TREATMENT WORKS AND WATERWORKS

Amendment made: No. 82, in page 32, leave out from beginning of line 7 to 'after' in line 10.—[Mr. Allan Stewart.]

Clause 49

LIABILITY OF WATER AUTHORITIES ETC. FOR DAMAGE CAUSED BY ESCAPES OF WATER ONTO AGRICULTURAL LAND

Mr. John MacKay: I beg to move Amendment No. 83, in page 32, line 33, after 'land', insert 'or forestry land'.

Mr. Deputy Speaker: With this we may take Government Amendments Nos. 84 to 89.

Mr. MacKay: These amendments arise from an undertaking that we gave in Committee to consult forestry interests and local authorities on the possibility of widening the scope of the clause, which was about agricultural land, to include forest land. We have concluded that we should do that and these amendments are designed to do just that.

Mr. Home Robertson: During the debates in Committee on this clause the Minister indicated the likely additional cost in any given year of extending the indemnity for damage to agricultural land as a result of flooding. We understand that the Government intend to extend the indemnity to cover damage to forestry land, although in Committee they made it clear that they were not prepared to extend that coverage any further. for instance to domestic or industrial property. Will the Government say now how much the additional cost will be to the taxpayer or ratepayer, or whoever it may be, of this further extension to the forestry industry?

Mr. MacKay: We do not think that the effect o' the amendment will be significant. If the hon. Gentleman is prepared to accept it, I shall write to him in detail later. We are, and the convention is, opposed to extending the provision of the clause to buildings, and so on, because we feel that insurances are available in the normal course of events. It would be costly to take that on board. I hope that the hon. Gentleman will be content with that brief answer.

Amendment agreed to.

Amendments made

No. 84, in page 32, line 43, after 'not', insert
', as regards compensation payable under that subsection by virtue of subsection (1A) above,'.

No. 85, in page 33, line 11, after `above,', insert 'the expressions'.

No. 86, in page 33, line 12, leave out 'means' and insert 'and "forestry land" mean'.

No. 87, in page 33, line 12, after 'used', insert `, respectively,'.

No. 88, in page 33, line 13, after 'agriculture', insert 'or for forestry'.

No. 89, in page 33, line 17, after '1948', insert
'and "forestry" means the growing of woods and forests for the production of timber and other forest products and the growing of trees for planting in such woods and forests'.—[Mr. John MacKay.]

Clause 52

APPROVED DUTIES OF COUNCILLORS AND ALLOWANCES IN RESPECT THEREOF

Amendments made: No. 90, in page 34, line 17, leave out `—(1)'.

No. 91, in page 34, line 21, leave out
`following provisions of this section'
and insert
'provisions of any relevant regulations made under section 50 of this Act'.

No. 92, in page 34, leave out from line 26 to end of line 19 on page 35.—[Mr. John MacKay.]

Clause 53

ABOLITION OF AMENITY COMMITTEE AND OF FISHERIES COMMITTEE

Mr. John MacKay: I beg to move amendment No. 93, in page 35, line 37, leave out from first 'Committee' to `appointed' in line 38.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 94, 95, 111 and 115.

Mr. MacKay: The purpose of these amendments is to take on board the views expressed in Committee about the abolition of the Secretary of State's fisheries committee.
Many hon. Members, including my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) and my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie), felt that the loss of the committee would be damaging to fish stocks in hydro-electric board areas. After giving the matter some consideration, the Government have decided that the fisheries committee should remain in existence. The amendments are necessary in order to bring that about.
We feel, however, that the amenity committee is no longer needed, as there are other bodies, such as the Nature Conservancy Council and the Countryside Commission, which are well able to meet the purpose for which the amenity committee was established. We intend that that abolition should go ahead but that the fisheries committee should remain in being.

Mr. O'Neill: We are very glad that the Minister has now seen fit to do a complete about-turn on the issue. All the evidence suggested that the Government's proposals were initially wrong-headed. We are pleased that the fisheries committee is being retained and that sense has broken out, at least briefly, in the Government mind.

Amendment agreed to.

Amendments made

No. 94, in page, line 41, leave out 'such committees' and insert 'such a committee'.

No. 95, in page 36, line 1, leave out from `1979)' to end of line 3 and insert 'is hereby abolished'.—[Mr. Allan Stewart.]

Clause 61

SHORT TITLE, COMMENCEMENT AND EXTENT

No. 96, in page 38, line 10, after 'below', insert `and to section 47(2) of this Act'.—[Mr. Allan Stewart.]

Schedule 1

RE-ALLOCATION OF FUNCTIONS RELATING TO THE COUNTRYSIDE

Amendment made:

No. 97, in page 39, line 33, leave out `35A.'.

Mr. Allan Stewart: I beg to move amendment No. 124, in page 39, leave out lines 35 to 37 and insert—


 '49.
All local and planning authorities
 Islands and district authorities. councils.


50.
All local and planning authorities.
Islands and district councils, and general
and district planning authorities.'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 125, 126, 104 and 105.

Mr. Stewart: Amendments Nos. 124, 125 and 126 remove an anomaly in the Bill by putting camp sites on all fours with caravan sites, so making the provision of both types of site the functions of islands and district councils. The purpose of the amendments is straightforward.
Amendment No. 104 meets the pledge given to my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie) in Committee in relation to winter quartering of travelling showmen.

Amendment No. 105 is a purely drafting amendment.

Amendment agreed to.

Amendments made: No. 98, in page 41, line 44, leave out paragraph 16

No. 125, in page 42, line 9, leave out "and caravan".

No. 126, in page 42, line 12, leave out from "means" to end of line 13 and insert
an islands or district council.".—[Mr. Allan Stewart.]

Schedule 2

AMENDMENTS OF TOWN AND COUNTRY PLANNING (SCOTLAND) ACT 1972

Mr. Allan Stewart: I beg to move amendment No. 99, in page 56, line 41, leave out "subsection (1) of'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 100, 101 and 102.

Mr. Stewart: These are technical amendments to clarify the powers of entry of regional planning authorities exercising various development control functions, and I commend them on that basis.

Amendment agreed to.

Amendments made: No. 100, in page 56, line 42, after "(a)" insert "in subsection (1)—(i)".

No. 101, in page 56, line 44, leave out "(b)" and insert "(ii)"

No. 102, in page 56, line 45, at end insert
; and
(b) at the end there shall be added the following subsection—
'(9) In subsection (1) (except as regards paragraph (a)) and in subsection (6) of this section "planning authority" includes a regional planning authority.'."—[Mr. Allan Stewart.]

Schedule 3

MINOR AND CONSEQUENTIAL AMENDMENTS

Mr. Alexander Fletcher: I beg to move amendment No. 103, in page 57, leave out lines 16 to 21.
The amendment deletes the amendment in paragraph 2 of schedule 3, which is now considered to be unnecessary.

Amendment agreed to.

Amendments made: No. 104, in page 57, line 27, leave out
`In paragraph 11A of Schedule 1' and insert—
'In Schedule 1—
(a) in paragraph 10(1) which relates to caravan site licences not being required by travelling showmen during certain periods), for the words "falling between the beginning of October in any year and the end of March" there shall be substituted the words "beginning on or after 20th September in any year and continuing until not later than 16th April"; and
(b)in paragraph 11A'.

No. 105, in page 57, line 27, after 'to', insert 'other'.—[Mr. Allan Stewart.]

Mr. Russell Johnston: I beg to move amendment No. 106, in page 60, line 22, at end insert—
`14A. In section 134(1) (which designates the local authority for the purposes of the Building (Scotland) Acts 1959 and 1970) after the word "Highland", there shall be inserted the words "excluding the District of Inverness".'.

Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
No. 107, in page 60, line 27, at end insert—
15A. In section 163(1) (which designates the local authority for the purposes of the Public Libraries (Scotland) Acts 1887–1955 in the application of those Acts to libraries) after the word "Highland", there shall be inserted the words "excluding the District of Inverness.".'.
No. 108, in page 60, line 31, at end insert—
'16A. In section 172(4) (which makes provision for the allocation of planning powers and functions amongst the various categories of authorities):—
(a) In the definition of a "general planning authority" after the word "Region" where it first occurs, there shall be inserted the words "excluding Inverness District"; and
(b)In the definition of a "district planning authority" at the end, there shall be added the words "and the Council of the Inverness District in the Highland Region".'.

Mr. Johnston: The amendments, although somewhat narrow in their application, bring forward a series of reasonably important principles. They are all concerned only with Inverness district council, but I am well aware that, for example, in regard to building control, many other district councils, which might hesitate to undertake planning powers, feel more than competent to take on this responsibility, which in many cases they are already undertaking, while being denied any capacity to regulate the financial basis on which they are called upon to act. Equally, on the planning question, Dumfries, for example, would probably feel likewise, on the principle of the matter.
I felt that it was appropriate, however, to confine my amendments to those matters exclusively concerning Inverness district, which is entirely within my constituency, and about which the district council has been unanimous in its representations, first to the Stoddart committee and subsequently to the Government. However, that means that I am put in the position of making a case for a series of unique exceptions.
Therefore, I begin by praying in aid, for the benefit of the Minister, a remark on this aspect made by the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) when he met representatives of the Inverness district council and myself in New St. Andrew's House on 7 January this year, when he was still the Minister responsible for these matters. He listened to arguments for making the changes to which my amendments would give effect. I can quote the Minister on this, which is always a good thing to be able to do, when one approves of what was said. I took down his words at the meeting.
The then Minister said:
 "I am not worried about something being unique. If that was the only problem there would be no problem. What is important is whether it enables matters to be more or less effectively operated.
I trust that the new Minister will lend his support to the views of his predecessor and that he will look at the changes open-mindedly and practically. I have heard him claim to be that sort of person. I hope that he can set aside arguments about precedents and exceptions to uniform arrangements, and all the old-fashioned, bureaucratic twaddle to which we are so often subjected.
Amendment No. 106 is concerned with building control and would give to Inverness district council in statute the powers that it already operates in practice. I am aware, from a letter to Provost A. G. Sellar of Inverness from the Minister that I received on the evening of the last debate, just before it adjourned, what his view on the matter is. He says:
On the question of building control, I can confirm that your council's desire for formal responsibility in this function is being considered in the context of a comprehensive review of the building control system currently being undertaken b) the Scottish Development Department.
I do not understand why, given our experience of the operation, of building controls in the Highland region, a change cannot be made now. There does not seem to be any practical reason why it should not be made.
The chief executive of Inverness district, Mr. Brian Wilson put it succinctly in a letter to Scottish Members on 4 December 1981
The building control function is, in fact, discharged wholly at District Council level; there is no body of knowledge on such matters within the Regional Council; and while we are popularly regarded as the buildings authority the level of service is dictated not by our assessment of need but by the Region's allocation of resources.
That is clear and specific. Even much smaller authorities than Inverness, such as Skye and Lochalsh, Bedonoch and Strathspey are clear that this is a function that they could undertake.
My amendments are narrowly confined to Inverness but the case for transfer of building control to all district councils is clearly made. I do not see why we have to wait for this beyond the consideration of the Bill in the Lords. There is no practical reason.
Amendment 107 applies to libraries. It cannot be said that Inverness is unable satisfactorily to discharge this function. Equally, the Government are open to the charge


of illogicality in that on the one hand they happily allow successful sharing arrangements between three Grampian districts, which hon. Members will know about, but at the same time resist a comparable change in the Highland regions.
Amendment 108 is the most significant. Hon. Members will remember that when local government was reformed it was decided not to split planning in the Highlands, the Borders and in the South-West. In the case of Inverness, this meant that the new authority—Inverness district—larger in area, population and resource than the old large borough of Inverness, was denied the exercise even of powers in respect of planning. Its powers were less than those that the old large borough had enjoyed.
One can produce many statistics. Briefly, of the 37 district councils in Scotland that are already responsible for local planning, 10 have populations below or only just above Inverness district, 13 have rateable values below or only marginally above Inverness district, 16 have penny rate products below or only marginally above Inverness district. That is 43 per cent. There is no argument about the ability of Inverness district to undertake local planning.
Equally—while it may be less easy to demonstrate—Inverness district would strongly deny that such a change would lead to extra cost or any increase in staff. However, such a change would restore to Inverness and its environs control over the development of its own community without disrupting the strategic over-view, which would remain with the region. That should be remembered. It would create a situation that is not significantly different from Aberdeen within the Grampian region, or Dundee within Tayside.
There is evidence that the existing arrangements have caused unnecessary difficulties, disagreements and disputes. I shall give four examples. In 1978, there were three applications for the establishment of hypermarkets on the Longman estate, owned by the district council which, like the large borough before it, has resisted its use for retail outlets. Despite the opposition of the district and the then regional planning officer, Mr. Calder, the committee agreed the applications. Subsequently, they were called in by the Secretary of State and rejected, but obviously it left a mark of dissent.
Secondly, in 1981, Calor Gas sought greatly to enlarge its storage of liquid petroleum on the Carse estate, also owned by the district council, which strongly opposed the idea. In the end, it went ahead. I shall not comment on the pros and cons, but there is no doubt that, as a result, limitations were imposed on densities in the adjoining area, and so affected what the district councils could do.
Thirdly, there is a similar outline application from Comet, for which the regional council has already expressed some support.
Lastly, there is the golf course, which I shall not mention at length, because at present I am seeking a meeting with the Secretary of State, whom I am glad to see here. However, I shall mention two aspects of the matter, which show the lack of agreement between the two levels of authority, which would have been overcome if Inverness district council had had planning powers. The application went to the Secretary of State, and the view of both the district council and the Highlands and Islands Development Board is that he received the wrong

information and reached his conclusion on the wrong information. The Highlands and Islands Development Board wrote a letter on the subject, in which it said that
The concern of the board is with the manner in which the decision was reached and the air of unreality which emanates from the Reporter's advice … We remain very concerned at the way in which this evidence was treated … This … is a casual way to treat the views of an economic development agency with 16 years34t experience of tourism promotion in the Inverness area.'
That is a pretty trenchant comment to be made by the secretary of the Highlands and Islands Development Board and directed to the Scottish Development Department, for which the Secretary of State is responsible.
It was for that reason that I wrote to the region asking it to postpone the Inverness plan for six weeks or so, to give me a chance to argue with the Secretary of State, who is a reasonable man and who, after all, must be affected by the fact that two public authorities take a dissenting view from that of his reporter. The region was unwilling to do that. It went ahead, and I was told that, according to focus officio—whatever that may be; I am sure that the Minister, with all his legal wisdom which, admittedly, has only recently been conferred on him, but it must by now be seeping in, will be able to tell me what it means, although I am told that it means that the matter is beyond recall, rather like a former Minister—the matter cannot be brought up again. If that is so, I hope that the Secretary of State will still be able to admit that he was wrong and say that subsequently a further application would be successful. There are serious disagreements and that cannot be good for the harmonious working of local government.
1.45 am
At the 7 January meeting the hon. Member for Pentlands—now Under-Secretary of State for Foreign and Commonwealth Affairs and who is not lacking in shrewdness in these matters—put forward an argument that was a variation of the famous West Lothian question from the days of the devolution debates. He said that the situation would arise, if Inverness was given local planning powers, in which regional members elected in the area of Inverness district would have a voice in planning decisions outwith the district—for example, in Caithness and Sutherland—but the converse would not apply.
That situation could easily be circumvented, in much the same way as non-elected members operate on the education committee, by excluding them from voting on local planning matters outwith the Inverness district. I would not dream of attempting to produce a form of words for that, but I see no reason why that could not be done at the next stage of the Bill.
There is also the famous argument on lack of uniformity, of which I am somewhat tired. In a letter to Inverness district council, the Government state that
 "a hybrid system in which the powers of authorities within the same regional area vary will tend to public confusion and, arguably, to a less efficient use of resources, without any guarantee of improvement in the quality of the service concerned.
There is much more twaddle of that nature.
That is old stuff. The Bill would not be necessary if one should not reassess what one is doing. The difficulties involved in public comprehension are not well-founded and have no supporting evidence to my knowledge apart from assertion. Both the practitioners of local planning—the architects and lawyers—can see no


difficulties, nor does the local chamber of commerce, which comprises the people likely to be making the applications. The only basis for the argument is that it has been repeated many times.
I accept, however, that the argument of uniformity is central, so I conclude by repeating the wise words of the
hon. Member for Pentlands. He said
I am not worried about something being unique. If that was the only problem there would be no problem. What is important is whether it enables matters to be more or less effectively operated.
I am sure that the effect of my amendments would lead to matters being more effectively operated. For that reason
I recommend them to the House. I also thank right hon. and hon. Members for their patience in giving me such a good hearing at such a late hour.

Sir Hector Monro: I am sorry to intervene at such a late stage in the Bill and at such a late hour, but the matter is as important to my constituency, as it is to that of the hon. Member for Inverness (Mr. Johnston).
I do not believe that it is any secret that in the original planning for the 1973 Act I was totally against the removal of district planning from the Highlands, the Borders and Dumfries and Galloway. I felt that the in-words, "estuarial planning", were completely irrelevant. I refer to the idea that all the land mass round the Clyde must be in one region—Strathclyde—and all that round the Forth and the Tay another. However, that idea was blown when Fife was given its own regional status.
The hon. Member for Inverness had a sound point and
I agree that the districts in the regional area are quite
capable of dealing with local planning. It is wrong to say that the populations are too small or that the planning staff would be too expensive. Strategic planning comes into force so rarely that it can be discounted. We shall have a major power station, a Solway barrage or a pulp mill only once in a blue moon. When that blue moon rises, the Secretary of State will no doubt make a decision anyway. Therefore, the Scottish Development Department has
greatly overplayed regional strategic planning in the past decade.
The districts have intimate local knowledge of planning for housing, garages, garden sheds and so on and such
decisions could well be left to them. Regional planning in the Highlands and Dumfries and Galloway should be carefully considered by my hon. Friend the Minister. One of my few disagreements with the Stodart report is that I
do not think that sufficient weight was given to those regions that wish to have district planning. I hope that my
hon. Friend will reconsider the matter, because in principle I agree with the hon. Member for Inverness.

Mr. Allan Stewart: As always, the hon. Member for Inverness (Mr. Johnston) put forward his case most cogently. He was at his persuasive best tonight, but I am sorry to tell him that he has not—in general terms—persuaded me. There are strong general arguments in favour of the principle of uniformity.
I shall deal with his three specific points in the amendments. My hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), now Under-Secretary of State for Foreign and Commonwealth Affairs, said
We will of course consider the Inverness case as a part of our general review of building control".
The hon. Gentleman asked why we could not make a decision on Inverness before that review. It would be

wrong to change responsibility in statute—as his amendment would do—before the nature of the building
control function has been redefined in the review.
As regards library services, there is little that I would
wish to add to the letter in which I tried to spell out the Government's position as clearly and fully as possible to Provost Sellar. The hon. Member for Inverness had the support, in principle, of my hon. Friend the Member for Dumfries (Sir H. Monro). However, no district in Dumfries and Galloway has supported the Inverness proposals outright, although some wanted more powers, statutorily or otherwise. As a result of the representations from Inverness, we consulted the districts in the three regions concerned. In Highland, two districts supported Inverness. Four districts find the present system acceptable and the region strongly supports the status quo. The region argues that the divisional committee system already deals with 95 per cent. of all applications and that the transfer of powers—as suggested by Inverness—would be costly in terms of resources and manpower. Therefore, there is a clear difference of view locally.
The hon. Member for Inverness asked me what focus officio meant. In essence it means that the Secretary of State has taken his decision and cannot reopen it or comment on it.

Mr. Johnston: Does that mean that even if the Secretary of State is convinced that he has made a mistake he cannot publicly admit it? The Secretary of State may be many things, but he is not infallible.

Mr. Stewart: We are, of course, talking about a legal term. The legal term that the hon. Gentleman asked me to define means that the Secretary of State has taken his decision, cannot reopen the question and cannot comment on the decision that he has made.

Amendment negatived.

Mr. Allan Stewart: I beg to move Government
Amendment No. 109, in page 61, line 18 leave out
'words "subsection 108A of this Act"'
and insert 'word "subsection"'.

Mr. Deputy Speaker: With this it will be convenient to take Government Amendment No. 110.

Mr. Stewart: These are technical amendments which result from defective drafting.

Amendments agreed to.

Amendments made: No. 110, in page 61, line 20 after '1966', insert ' and to section'.

No. 11, in page 64, line 46, at end insert—

'The Electricity (Scotland) Act 1979 (c. 11)

32A. In section 5(2) (which provides that the Secretary of State shall appoint an Amenity Committee and a Fisheries Committee)—
(a) for the words from "two Committees" to "respectively)" there shall be substituted the words "a Committee (in this Act referred to as the Fisheries Committee)"; and
(b)for the words "those Committees" the shall be substituted the words "the Committee".

32B. In Schedule 4 (which makes provision for the constitution and functions of the Amenity Committee and the Fisheries Committee)—

(a) in paragraph 1—

(i) the words "Amenity Committee and the" shall cease to have effect;
(ii) for the words "them respectively" there shall be substituted the word "it"; and
(iii) for the words "amenity and fisheries respectively" there shall be substituted the word "fisheries";


(b) in paragraph 2 for the words "each of those Committees" and "each Committee" where they respectively occur there shall be substituted the words "the Committee";
(c) in paragraph 3—

(i) the words "Amenity Committee and the" shall cease to have effect; and
(ii) for the words "each of those Committees" there shall be substituted the words "the Committee";
(d) paragraph 5 shall cease to have effect; and
(e) in paragraph 6 the words "Amenity Committee and the" shall cease to have effect.".—[Mr. Allan Stewart.]

Mr. Fletcher: I beg to move Amendment No. 112 in page 65, line 15, leave out 'over school age' and insert `taking part therein'. The purpose of this amendment is to make it clear that, although leisure and recreation provision is handed over to the districts, the responsibility for further education in the widest sense will remain the responsibility of the regions. Nothing in the Bill is intended to confine the activities that the regional council might wish to mount to promote the educational development of those within its area.

Amendment agreed to.

Amendment made: No. 113, in page 65, line 23, at end insert—

'The Tenants' Rights, Etc (Scotland) Act 1980 (c.52)

34A. In Section 2—

(a) in subsection (6) which prescribes a time limit for service of a notice of acceptance—

(i) in paragraph (a) after the words "(3) above" there shall be inserted the words "or by referring the matter to the Lands Tribunal for Scotland under subsection (2)(d) of section 7 of this Act";
(ii) in paragraph (b) for the words from "determined" to "Scotland" there shall be substituted the word "resolved"; and
(iii) after sub-paragraph (iii) there shall be inserted the following sub-paragraph—
"(iiia) the service of an offer to sell on him by virtue of subsection (3)(b of section 7 of this Act"; and
(b) at the end there shall be added the following subsection—
"(12 In the foregoing provisions of this section, 'offer to sell' includes such offer to sell as is mentioned in section 7(2)(d) of this Act.'.

34B. In section 7(2)(c) (which relates to matters being referred to the Lands Tribunal for Scotland)—
(a)after the words "right to purchase)" there shall be inserted the words "or has made an order under subsection (3)(b) of this section"; and
(b) after the words "said finding" there shall be inserted the words "or, as the case may be, order".'.—[Mr. Younger.]

Mr. Stewart: I beg to move Amendment No. 114, in page 65, line 31, at end insert—
'35A. In paragraph 33 of Schedule 32 (which makes provision as regards rates in Scotland in respect of lands and heritages in an enterprise zone),—

(a) at the end of sub paragraph (1) there shall be added the following proviso—
"Provided that where the lands and heritages are situated only partially within any one enterprise zone their value shall, for the purpose of determining what rates (if any) are payable in respect of the lands and heritages, be apportioned between so much of them as lies within, and so much of them as lies outwith, that zone as if—

(i) the apportionment were by reason of their extending into two or more rating areas; and
(ii) the boundary of the enterprise zone were the boundary of such an area."; and

(b) at the end of sub-paragraph (4) there shall be added the words "; and `rating area' means the area of a rating authority.".'.
This amendment ensures that exemption from a liability to pay rates in respect of certain domestic lands and heritages situated within an enterprise zone in Scotland should clearly apply to those parts of properties straddling a boundary which lie within the enterprise zone. That was always the Government's intention.

Amendment agreed to.

Schedule 4

REPEALS

Mr. Stewart: I beg to move amendment No. 127, in page 67, line 29 at end insert—


'1968 c. 49.
The Social Work (Scotland) Act 1968.
Section 85.'.


This is a technical amendment to repeal section 85 of the Social Work (Scotland) Act 1968 which has become redundant.

Amendment agreed to.

Amendments made:

No. 115, in page 69, column 3, leave out lines 9 and 10 and insert—
'In Schedule 4, in each of paragraphs 1, 3 and 6 the words "Amenity Committee and the"; and paragraph 5.'.

No. 116, in page 69, column 3, leave out lines 22 to 24 and insert—
'In section 1 (1), the word "tenancy".

In section 4 (3), the words "incurred in connection with the sale of the dwellinghouse".'.—[Mr. Allan Stewart.]

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Younger.]

Mr. Millan: The House will know that we are voting against the Third Reading because of our extreme opposition to clause 1. There are many useful things in the Bill. I thank my hon. Friends who handled the Bill in Committee for the Opposition, the other Opposition Members of the Committee and some Conservative Members, for making some improvements to the less contentious parts of the Bill. However, we thoroughly deplore clause 1 and we shall vote against the Third Reading.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 100, Noes 39.

Division No. 151]
[11.00 pm


AYES


Archer, Rt Hon Peter
Booth, Rt Hon Albert


Beith, A. J.
Boothroyd, MissBetty






Brown, Ron(E'burgh, Leith)
Litherland, Robert


Buchan, Norman
Mabon, Rt Hon Dr J. Dickson


Callaghan, Jim(Midd't'n&amp;P)
McCartney, Hugh


Campbell-Savours, Dale
McKay, Allen (Penistone)


Canavan, Dennis
McKelvey, William


Carmichael, Neil
MacKenzie, Rt Hon Gregor


Cocks, Rt Hon M. (B'stol S)
Maclennan, Robert


Cowans, Harry
McNamara, Kevin


Craigen, J. M. (G'gow, M'hill)
McTaggart, Robert


Cryer, Bob
McWilliam, John


Dalyell, Tam
Marks, Kenneth


Deakins, Eric
Marshall, D (G'gowS'ton)


Dean, Joseph (Leeds West)
Maxton, John


Dewar, Donald
Millan, Rt Hon Bruce


Dixon, Donald
O'Neill, Martin


Dormand, Jack
Pavitt, Laurie


Dunwoody, Hon Mrs G.
Penhaligon, David


Eadie, Alex
Powell, Raymond (Ogmore)


Eastham, Ken
Ross, Ernest (Dundee West)


Evans, Ioan (Aberdare)
Sever, John


Ewing, Harry
Skinner, Dennis


Foulkes, George
Snape, Peter


Ginsburg, David
Strang, Gavin


Grimond, Rt Hon J.
Tinn, James


Hamilton, James(Bothwell)
Wainwright, E. (Dearne V)


Hamilton, W. W. (C'tral Fife)
Welsh, Michael


Harrison, Rt Hon Walter
White, Frank R.


Hogg, N. (EDunb't'nshire)
White, J. (G'gow Pollok)


HomeRobertson, John
Wilson, Gordon (DundeeE)


Howells, Geraint
Woolmer, Kenneth


Hughes, Robert (Aberdeen N)
Young, David (BoltonE)


Janner, Hon Greville



Johnston, Russell (Inverness)
Tellers for the Ayes:


Lambie, David
Mr, George Morton and


Leadbitter, Ted
Mr. Frank Haynes.




NOES


Alexander, Richard
Bruce-Gardyne, John


Alison, Rt Hon Michael
Budgen, Nick


Ancram, Michael
Cadbury, Jocelyn


Arnold, Tom
Carlisle, John (Luton West)


Aspinwall, Jack
Clarke, Kenneth (Rushcliffe)


Atkins, Robert (PrestonN)
Cope, John


Atkinson, David (B'm'th,E)
Corrie, John


Beaumont-Dark, Anthony
Cranborne, Viscount


Benyon, Thomas (A'don)
Dorrell, Stephen


Berry, Hon Anthony
Douglas-Hamilton, LordJ.


Bevan, DavidGilroy
Dover, Denshore


Biggs-Davison, SirJohn
Dunn, Robert (Dartford)


Blackburn, John
Emery, Sir Peter


Bonsor, SirNicholas
Fairbairn, Nicholas


Bright, Graham
Fairgrieve, SirRussell


Brooke, Hon Peter
Faith, Mrs Sheila


Brotherton, Michael
Fenner, Mrs Peggy


Brown, Michael (Brigg&amp;Sc'n)
Fletcher, A. (Ed'nb'gh N)




Fletcher-Cooke, SirCharles
Neale, Gerrard


Fowler, Rt Hon Norman
Newton, Tony


Gardiner, George(Reigate)
Normanton, Tom


Garel-Jones, Tristan
Onslow, Cranley


Goodhart, SirPhilip
Osborn, John


Goodlad, Alastair
Page, John (Harrow, West)


Greenway, Harry
Page, Richard (SW Herts)


Griffiths, Peter Portsm'thN)
Parris, Matthew


Grist, Ian
Peyton, Rt Hon John


Gummer, JohnSelwyn
Pollock, Alexander


Hamilton, Hon A.
Price, SirDavid (Eastleigh)


Hamilton, Michael (Salisbury)
Proctor, K. Harvey


Hampson, Dr Keith
Renton, Tim


Hannam, John
RhysWilliams, SirBrandon


Haselhurst, Alan
Roberts, M. (Cardiff NW)


Hawkins, Paul
Rost, Peter


Hawksley, Warren
Sainsbury, Hon Timothy


Hayhoe, Barney
Shaw, Giles (Pudsey)


Heddle, John
Sims, Roger


Hurd, Rt Hon Douglas
Speed, Keith


Jopling, Rt Hon Michael
Speller, Tony


Kellett-Bowman, MrsElaine
Spicer, Michael (S Worcs)


Kershaw, SirAnthony
Sproat, Iain


Kimball, SirMarcus
Stainton, Keith


Knight, MrsJill
Stanbrook, Ivor


Knox, David
Stevens, Martin


Lang, Ian
Stewart, A. (E Renfrewshire)


Lawson, Rt Hon Nigel
Stradling Thomas, J.


Lee, John
Temple-Morris, Peter


LeMarchant, Spencer
Thomas, Rt Hon Peter


Lester, Jim (Beeston)
Thompson, Donald


Lloyd, Peter (Fareham)
Thorne, Neil(IlfordSouth)


Loveridge, John
Thornton, Malcolm


Lyell, Nicholas
Townend, John (Bridlington)


Macfarlane, Neil
Trippier, David


MacKay, John (Argyll)
van Straubenzee, Sir W.


McNair-Wilson, M.(N'bury)
Viggers, Peter


McQuarrie, Albert
Waddington, David


Major, John
Walker, B. (Perth)


Marlow, Antony
Walker-Smith, Rt Hon Sir D.


Mather, Carol
Wall, SirPatrick


Maude, Rt Hon Sir Angus
Waller, Gary


Maxwell-Hyslop, Robin
Warren, Kenneth


Meyer, Sir Anthony
Watson, John


Mills, Iain (Meriden)
Wells, Bowen


Mills, Peter (West Devon)
Wheeler, John


Moate, Roger
Wolfson, Mark


Monro, SirHector
Young, SirGeorge (Acton)


Montgomery, Fergus
Younger, Rt Hon George


Morgan, Geraint



Morrison, Hon C, (Devizes)
Tellers for the Noes:


Mudd, David
Mr, Robert Boscawen and


Murphy, Christopher
Mr, David Hunt.


Myles, David

Question accordingly agreed to.

Division No. 152]
[2.00 am


AYES


Alexander, Richard
Dover, Denshore


Ancram, Michael
Dunn, Robertf(Dartford)


Atkinson, David(B'm'th,E)
Fairbairn, Nicholas


Berry, Hon Anthony
Fairgrieve, SirRussell


Biggs-Davison, SirJohn
Faith, Mrs Sheila


Blackburn, John
Fenner, Mrs Peggy


Boscawen, Hon Robert
Garel-Jones, Tristan


Bright, Graham
Goodlad, Alastair


Brooke, Hon Peter
Griffiths, PeterPortsm'thN)


Brotherton, Michael
Grist, Ian


Brown, Michael(Brigg&amp;Sc'n)
Gummer, John Selwyn


Bruce-Gardyne, John
Hamilton, Hon A.


Budgen, Nick
Hampson, Dr Keith


Carlisle, John(LutonWest)
Hannam, John


Cope, John
Hawkins, Paul


Corrie, John
Hawksley, Warren


Cranbome, Viscount
Heddle, John


Dorrell, Stephen
Hogg, Hon Douglas(Gr'th'm)


Douglas-Hamilton, LordJ.
Hurd, Rt Hon Douglas






Jopling, Rt Hon Michael
Roberts, M.(CardiffNW)


Kimball, Sir Marcus
Rost, Peter


Knox, David
Sainsbury, Hon Timothy


Lee, John
Shaw, Giles(Pudsey)


LeMarchant, Spencer
Sims, Roger


Lester, Jim(Beeston)
Speed, Keith


Lloyd, Peter(Fareham)
Speller, Tony


Lyell, Nicholas
Spicer, Michael(SWorcs)


MacKay, John(Argyll)
Sproat, Iain


McNair-Wilson, M.(N'bury)
Stainton, Keith


McQuarrie, Albert
Stanbrook, Ivor


Major, John
Stevens, Martin


Marlow, Antony
Stewart, A.(E Renfrewshire)


Mather, Carol
Stradling Thomas, J.


Maxwell-Hyslop, Robin
Temple-Morris, Peter


Meyer, Sir Anthony
Thomas, Rt Hon Peter


Mills, Iain(Meriden)
Thompson, Donald


Moate, Roger
Thorne, Neil(llfordSouth)


Monro, Sir Hector
Trippier, David


Morrison, Hon C.(Devizes)
van Straubenzee, SirW.


Murphy, Christopher
Viggers, Peter


Myles, David
Walker,B. (Perth)


Neale, Gerrard
Wall, Sir Patrick


Newton, Tony
Waller, Gary


Normanton, Tom
Wells, Bowen


Osborn, John
Wheeler, John


Page, John(Harrow, West)
Wolfson, Mark


Page, Richard(SW Herts)
Young, Sir George(Acton)


Parris, Matthew
Younger, Rt Hon George


Pollock, Alexander



Proctor, K.Harvey
Tellers for the Ayes:


Renton, Tim
Mr. Ian Lang and


RhysWilliams, Sir Brandon
Mr. David Hunt.




NOES


Brown, Ron(E'burgh, Leith)
Cryer, Bob


Campbell-Savours, Dale
Dewar, Donald


Canavan, Dennis
Dormand, Jack


Carmichael, Neil
Eadie, Alex


Cocks, Rt Hon M. (B'stolS)
Ewing, Harry


Craigen, J.M. (G'gow, M'hill)
Hamilton, James(Bothwell)





Hamilton, W.W. (C'tral Fife)
Maxton, John


Harrison, Rt Hon Walter
Millan, Rt Hon Bruce


Haynes, Frank
O'Neill, Martin


Hogg, N.(EDunb't'nshire)
Penhaligon, David


Home Robertson, John
Robertson, George


Hughes, Robert(Aberdeen N)
Ross, Ernest (Dundee West)


Johnston.Russell(Inverness)
Skinner, Dennis


Lambie, David
Wainwright, E.(DearneV)


McCartney, Hugh
Welsh, Michael


McKelvey, William
White, J.(G'gowPollok)


MacKenzie, Rt Hon Gregor
Wilson, Gordon(Dundee E)


Maclennan, Robert



McNamara, Kevin
Tellers for the Noes:


McTaggart, Robert
Mr. George Morton and


McWilliam.John
 Mr. Allen McKay.


Marshall, D(G'gowS'ton)

Question accordingly agreed to.

Bill read the Third time, and passed.

STATUTORY INSTRUMENTS &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committees on Statutory Instruments, &amp;c.).

ELECTRICITY

That the draft Electricity (Borrowing Powers) (Scotland) Order 1982, which was laid before this House on 8th April, be approved.—[Mr. Younger.]

Question agreed to.

CIVIL AVIATION BILL [LORDS]

Ordered,
That, in respect of the Civil Aviation Bill [Lords], notices of Amendments, new Clauses and new Schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a second time.—[Mr. Boscawen.]

North-East Lancashire (Enterprise Allowance Scheme)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]

Mr. John Lee: I welcome the opportunity of raising on the Adjournment a subject of particular interest to me, which is the progress of the enterprise allowance scheme in North-East Lancashire. At the outset I pay tribute to the Minister, the Manpower Services Commission and the Departments of Employment and Industry for selecting and designating North-East Lancashire or, more particularly, the Pendle, Hyndburn, Burnley and Rossendale borough council areas as one of the three English pilot areas, the others being Coventry and the Medway towns. I hope to demonstrate how right the authorities were in choosing North-East Lancashire and how well it has responded to the challenge.
I have no wish in this short debate to dwell on the problems of North-East Lancashire, but I must place on record the pressures on so many of its industries such as textiles, footwear, aerospace and furniture, with the resulting rise in unemployment of approaching 350 per cent. between mid-1979 and the present day. Certainly that is true of the Nelson and Colne travel-to-work area. Last week I arranged for a delegation from Pendle to plead for the retention of intermediate area status at the Department of Industry.
Having said that, there are some excellent firms in North-East Lancashire. Many started from small beginnings by individuals with limited capital. There is a great entrepreneurial spirit in the area and I find reassuring the demand that exists for new small workshops and the sub-units that have been converted from older mill premises.
The House will recall the characteristics of the enterprise allowance scheme. The scheme started in January, just over three months ago. To qualify, individuals have to be aged between 18 and 65, have capital availability of £1,000, have been in receipt of unemployment or supplementary benefit at the time of making their application, and have been unemployed or under formal notice of redundancy for 13 weeks. Successful applicants receive £40 a week for 12 months, which provides them with an income during the early period of endeavouring to establish a business.
What has been the interest in and take-up of the scheme? I am happy to say that it has been exceptionally good. It has been so good that there is a real likelihood of the scheme running out of funds in about mid-July on presently allocated resources for new applicants. The North-East Lancashire allocation equated to the backing of 330 individuals for 12 months on the basis of £40 a week. Already 361 applications have been received and of these 94 have been rejected, cancelled or postponed, and 157 have been approved. I am especially pleased that over one-third of the latter come from the Pendle area. I understand that 110 are awaiting decisions and that the majority of these are likely to be favourable. These figures at least equal Coventry's and are demonstrably better than those in the Medway towns.
The House will be aware that the only restriction on the types of business that come within the scheme relate to

those that are considered to be socially undesirable. Those that are now operational fall into four broad categories. First, there is retailing of items such as video films, children's wear and a specialist coffee and tea shop. Secondly, there are services to building such as plumbing, bricklaying, electrical work, joinery and grant work. Thirdly, there are motor car maintenance services such as body spraying and building, mobile servicing and autoeletrical work. Fourthly, there are agricultural services such as stocktaking, the cleaning of farm buildings and the manufacturing of show jumps. There is also a wide miscellany of projects and businesses such as the manufacturing of perfumes, sports bags and soft toys—indeed, we have a knife grinder.
The tremendous interest in the scheme has not just happened. I pay tribute to all those who have administered and promoted the scheme so far, especially to Mr. MacNamara, the head of the Burnley jobcentre, where the scheme is administered, and to Mrs. Porter and her team, and the other jobcentres that are involved. There are also the area's local authorities, the North-East Lancashire Development Association and the local radio and press, which have helped in the promotion. At the outset of the scheme I organised at the Nelson and Colne college on a Sunday afternoon a small business seminar, which was attended by approximately 80 people, to boost and promote the scheme.
We then established a Pendle small firms counselling service with experienced business men to guide and advise. I should like to thank those individuals for their efforts. I am looking forward to opening a specialist anticorrosion company in Trawden on Friday. It has been started by Mr. Peter Clegg who six months ago was one of the victims of redundancy. He will receive support under our enterprise allowance and will initially provide employment for four people. My hon. Friend the Member for Rossendale (Mr. Trippier) is anxious to speak in the debate. He has supported the scheme most enthusiastically both personally and by the Rossendale Trust which was his inspiration. I know that the hon. and learned Member for Accrington (Mr. Davidson) and the hon. Member for Burnley (Mr. Jones), who unfortunately cannot be with us, are keen to support the whole concept of the scheme.
The small firms information service, in conjunction with the MSC job centres, has held 20 group seminars in Burnley with an attendance of 263 people. There have been 96 counselling or advisory sessions, and more are planned. In addition, a five-week course starts next month at the Burnley technical college sponsored by the MSC under its training opportunities scheme known as TOPS.
I should like to make a number of observations and comments on the scheme. First, it appears that about 20 to 25 per cent. of those on the scheme were formerly receiving unemployment benefit of over £40 a week. To their credit they are accepting a short-term income reduction to try to get their own businesses established. Second, some people would have applied to participate in the scheme but have been excluded as they were not entitled to supplementary benefit because of other sources of income, for example, a married woman with a husband working.
Third, the £1,000 capital restriction seems to have presented few problems. I should emphasise that it is not necessary actually to have cash in the hand. A letter from a bank manager promising support, if necessary, would appear to suffice. Fourth, the 13-weeks unemployed


restriction seems to present some problems. While one would certainly not wish to encourage people in work artificially to declare themselves redundant to qualify, nevertheless I ask the Minister to look again at the position of people who have worked for, say, six weeks under notice of redundancy and on termination wish to start in business immediately. Our existing rules require that person effectively to kick his heels for another six or seven weeks.
I should like to thank the Minister for one thing. Where we have taken up particular cases of apparent anomalies his Department has done everything possible to help. One of my constituents had been working on the MSC community enterprise programme. Initially, he was told that that did not count towards the 13-weeks rule, although apparently people who completed a TOPS course were eligible. As a result of my intervention it has been agreed that provided all other conditions have been fulfilled and the TOPS or CEP courses have been completed—they must not give them up simply to claim the enterprise allowance—both groups will be eligible.
I hope that I have demonstrated the successful progress of the scheme. Many new enterprises have been spawned and some new jobs created. Naturally, there will be failures—two have already ceased trading—but I believe that this exercise is most beneficial and cost effective. While it is true that the State pays out a weekly allowance, it saves on the unemployment and social security benefit that it was formerly paying. It must make financial and social sense to encourage people to become self-employed rather than remain unemployed.
I thank the Minister for his help and support. I ask him to make more funds available so that we may build on what has been created and enable us to carry on with the enterprise allowance scheme. In time perhaps a national scheme may be considered, modelled on our success.

Mr. D. A. Trippier: I warmly congratulate my hon. Friend the Member for Nelson and Colne (Mr. Lee) on raising this important subject on the Adjournment. I could not emulate his fluent and articulate contribution, but as a North-East Lancashire Member I am equally anxious to record my thanks to my hon. Friend the Under-Secretary for selecting and designating Rossendale as one of the areas in the sub-region of North-East Lancashire qualifying for this useful scheme.
My hon. Friend the Member for Nelson and Colne was kind enough to refer to the Rossendale enterprise trust, of which we in the valley are immensely proud. I am relieved of the duty of explaining the purpose of the trust to the Minister, because he kindly visited my constituency last year and is well aware of the trust.
In the context of the debate, the trust, through the excellent offices of its director, Mr. Roger Pearson, has played a significant part in encouraging constituents of mine to take advantage of the enterprise allowance scheme. The take-up in Rossendale has been very encouraging and, even at this stage, I can assure the Under-Secretary of its success.
I wish to make two brief points. The first is to echo the appeals of my hon. Friend the Member for Nelson and Colne to the Minister to recognise the success of the initiative and ensure that sufficient funds are made available for the completion of the pilot scheme.
Secondly, I am convinced that many more people in North-East Lancashire would benefit from the scheme if they were aware of it.
The House must congratulate my hon. Friend the Member for Nelson and Colne on his ingenuity in publicising the scheme through the debate, but my hon. Friend the Under-Secretary must appreciate that his Department could assist by again advertising the scheme in the appropriate local newspapers. In that way, the Under-Secretary, whose concern for the unemployed is well known to us all, could emphasise the practical benefits of a bold and imaginative scheme which I know would attract many people who are anxious to start their own businesses. Once again, I thank the Minister for starting the scheme and I commend it to my constituents.

The Under-Secretary of State for Employment (Mr. Peter Morrison): I am pleased that my hon. Friend the Member for Nelson and Colne (Mr. Lee) has raised this important subject. I know that he has been closely connected with the enterprise allowance scheme in his constituency and I was interested to hear that he will be helping later this week at the opening of an anti-corrosion company, the proprietor of which, Mr. Peter Clegg, was declared redundant not long ago.
I well remember visiting the constituency of my hon. Friend the Member for Rossendale (Mr. Trippier) and talking to representatives of the Rossendale trust, in which he has played a major part. The trust has played its part in promoting the scheme. This is the first opportunity that we have had in the House to debate the scheme and for that reason, too, I am grateful to my hon. Friend the Member for Nelson and Colne for initiating the debate.
Conservatives believe strongly in initiative, hard work, enterprise and profit. We know that, unless a company is making profits, there will not be a future for that firm. That is what the scheme is all about. It recognises the difficulty of getting, and keeping, a business going, especially for those who are unemployed. Because of that, the scheme was conceived and born. It is a bridge between being unemployed and going it alone. Without the scheme, there would not be a real start for many of those who find themselves redundant today.
Both my hon. Friends have pointed out why the scheme is a success. Because of the lack of finanace we had to make the scheme a pilot one. The finance was found from limited resources. There was about £2·1 million for the schemes in England. That means that about 1,000 people will be able to participate. The pilot areas that we chose were, we hoped, a cross-section of the country. As both my hon. Friends said, we chose North-East Lancashire, Coventry, Medway, my right hon. Friend the Secretary of State for Wales chose the Wrexham-Shotton area and my right hon. Friend the Secretary of State for Scotland chose north Ayrshire.
As my hon. Friend the Member for Nelson and Colne reminded the House, the take-up has been staggeringly good. He quoted a figure of 157 approvals for North-East Lancashire. My figure is a little out of date. At the end of April there were 142 in North-East Lancashire, 145 in Coventry, 79 in the Medway towns, 58 in the Wrexham and Shotton area and 13 in north Ayrshire. That adds up to a total of 437.
The progress of the pilot schemes is being monitored carefully. I hope that both my hon. Friends trust, as do I


and the Government, that the schemes will be successful. I am sure that they will accept that by and large, we are at an early stage and must walk carefully. As my hon. Friend the Member for Nelson and Colne said, we must be prepared to accept that not all of the schemes will be as successful as we hoped. We must expect some to fail. That is why we must regard them as pilot schemes although I am hopeful that, by and large, they will be successful.
I know that entrepreneurial flair and spirit in my hon. Friend's constituencies flourishes. I am sure, therefore, that they were the right areas for a pilot scheme. I say that because I have been invited by both hon. Friends, for several years now, to meet their constituents to see for myself what sort of people they are, especially as my constituency is not far away in the North-West. I know that they are composed of proprietors' businesses. That is where employment comes from. I know that prosperity has always started from small beginnings and that they are prepared not just to pick up a challenge but to carry it forward. That, as I have already said, has been proved by the take-up in North-East Lancashire which, by any stretch of the imagination has been exceptionally good.
My hon. Friend pointed out the difficulties in his constituency and the problems of the textile companies. He also referred to the problems relating to special development area status, and so on. He will appreciate that that is a matter for my right hon. Friends the Secretaries of State for Trade and for Industry. All I can say is that the transition from the old to the new, and moving towards new industries and away from old industries is always difficult. From what I have seen of the scheme those difficulties are being potentially transcended because people like my hon. Friends are putting everything that they can into making sure that we are moving forward rather than harking back.
I am most grateful to my hon. Friend the Member for Nelson and Colne for his very complimentary remarks about the Burnley jobcentre officials, particularly the manager, Mr. MacNamara, and Mrs. Porter, who is responsible for the day-to-day administration of the enterprise allowance scheme. I hope that he will agree that I should pass on his and my own thanks to the chairman of the Manpower Services Commission and to both those officials. I also agree with both my hon. Friends about the invaluable contribution made by the Department of Industry small business centre, the manager of which is Mr. Paul Davidson, and I shall certainly pass on those remarks to my hon. Friend the Under-Secretary of State for Industry.
Among the specific points raised by my hon. Friends was, first, the level of the allowance. My hon. Friend the

Member for Nelson and Colne pointed out that, with the allowance at £40, some people were taking a cut in what they would otherwise have had in their pockets. That is so, but in 75 per cent. to 80 per cent. of cases the applicant will receive more benefit than would hitherto have been the case. The allowance is not simply a subsidy to help people set up their own businesses. It is to help people dependent on benefit who wish to set up their own business but who may be deterred because they would lose their entitlement to benefit.
My hon. Friend also referred to the £1,000 which is needed to set up the business. I accept that we are still in a trial period. That seems to me to be about the right level, but I hope that my hon. Friends will bear with me until we monitor the trials taking place.
The qualifying requirement of 13 weeks' unemployment was designed to exclude people who gave up jobs and businesses simply to apply for support under the scheme. Removal of the qualifying period would reduce the cost-effectiveness of the scheme. That would not be acceptable to the Government as we are anxious to ensure that taxpayers' money is spent to the best effect.
I am extremely grateful to my hon. Friends the Members for Nelson and Colne and for Rossendale for raising this matter. I know that both have done all that they possibly can to promote the enterprise allowance scheme. Knowing them both and their constituencies, I am convinced that that is the perfect pilot area for the scheme. I know, too, that local radio, television and the press in the area have seen to it that the opportunities offered by the scheme are properly publicised. I should like to ask my hon. Friends to thank the media in their area for putting before their constituents the opportunities that are available under the scheme.
I assure both my hon. Friends that the Government will monitor carefully the future of the pilot areas. I assure them that the Government hope that the scheme will be a great success. My hon. Friends ask that more funds should be made available. I hope that, if the scheme is deemed to be a success, more funds will be available. It would certainly be a proper use of taxpayers' money.
The Government believe in people being able to set up their own businesses. When they do that it is not just for themselves, but, in the longer term, it is for those whom they employ, and that in turn will benefit not just themselves but the whole of the community.
Once again, I thank my hon. Friend for putting the scheme before the House. I hope that we shall debate it time and time again, as it expands, providing that the pilot areas are successful.

Question put and agreed to.

Adjourned accordingly at twenty-five minutes to Three o' clock.